CALGARY, ALBERTA–(Marketwired – Jan. 24, 2017) – Craft Oil Ltd. (“Craft” or the “Company”) is pleased to announce that it has entered into a definitive agreement with Cardinal Energy Ltd. (“Cardinal”) to sell assets (the “Cardinal Assets”) for $41 million, prior to any closing adjustments (the “Cardinal Disposition”), consisting of approximately $4.0 million in cash and approximately 4.0 common shares of Cardinal (“Cardinal Shares”) at a deemed price of $9.1727 per Cardinal Share (collectively, the “Cardinal Proceeds”). The Company is also pleased to announce that has entered into a definitive agreement with Point Loma Resources Ltd. (“Point Loma”) to sell assets (the “Point Loma Assets”) for $1.6 million, prior to any closing adjustments (the “Point Loma Disposition”), consisting of approximately 4.0 common shares of Point Loma (“Point Loma Shares”) at a deemed price of $0.40 per Point Loma Share (the “Point Loma Proceeds”, and collectively with the Cardinal Proceeds, the “Disposition Proceeds”.)
The Cardinal Assets include Q4, 2016 production of approximately 1,625 barrels of oil equivalent (“boe”) per day, weighted 36% oil and NGL, located in the Grande Prairie area of Northwest Alberta. The Cardinal Disposition will have an effective date of March 1, 2017 and is expected to close on or before March 15, 2017. The Cardinal Disposition is subject to standard customary closing conditions. In addition, as the Cardinal Disposition comprises a sale of substantially all of the assets of the Company, the Cardinal Disposition is also subject to approval of the Craft shareholders. It is anticipated that a special meeting of the Craft shareholders will be held in or around late February 2017 to approve the Cardinal Disposition. Listing on the Toronto Stock Exchange (the “TSX”) of the Cardinal Shares to be received as partial consideration for the Cardinal Disposition is subject to the approval of the TSX.
National Bank Financial Inc. acted as financial advisor to Craft with respect to the Cardinal Disposition.
The Point Loma Assets include Q4, 2016 production of approximately 410 boe per day weighted 95% to natural gas, located in the Judy Creek and Thornbury-Portage areas of Alberta. The Point Loma Disposition will have an effective date of January 1, 2017 and is expected to close on or about February 17, 2017. The Point Loma Disposition is subject to standard customary closing conditions. Listing on the TSX Venture Exchange (the “TSXV”) of the Point Loma Shares to be received as consideration for the Point Loma Disposition is subject to the approval of the TSXV.
The Company is currently in discussions in respect of the disposition of the remainder of its assets (the “Remaining Assets”). While the Company is in discussions regarding potential transactions with certain third parties, no agreement has been reached and there is no assurance that these discussions will continue or that any transactions will be agreed upon. Craft will provide further information at such time as it is appropriate to make a public announcement on any potential transactions, should they occur. Any announcements regarding potential transactions will be disclosed in accordance with applicable legal and regulatory requirements.
Craft currently anticipates that the Company will distribute the Disposition Proceeds, as well as any additional proceeds received in connection with any disposition of the Remaining Assets, to the Craft shareholders following the completion of the disposition of its Remaining Assets.