CALGARY, Nov. 8, 2017 /CNW/ – As announced October 31, 2017, Manitok Energy Inc. (“Manitok” or the “Corporation“) (TSXV: MEI) and Questfire Energy Corp. (“Questfire“) (TSXV: Q.A) have entered into an amending agreement amending the Arrangement Agreement dated July 5, 2017, as amended effective September 15, 2017, between Manitok and Questfire to extend the outside date for completion of the previously announced plan of arrangement among Manitok, Questfire and shareholders of Questfire (the “Arrangement“) to November 30, 2017. To progress the Arrangement to closing, Manitok continues to work on several options to obtain the capital required to complete the Arrangement, and commence its capital program to continue its production growth, especially considering the recent improvement in commodity prices. Manitok has progressed two alternatives, involving debt alone and equity combined with debt, to the later stages of completion. Both options are at the final stages of due diligence and if due diligence is completed successfully, would require about 14 days to finalize negotiations and the definitive agreements.
To be prudent, Manitok is also reviewing potential alternatives to maximize shareholder value by reducing or replacing its current credit facility through a combination of asset sales and/or new credit facility. The Corporation will concurrently conduct an asset sales process of its existing properties to determine the feasibility of completing such transaction before the end of the year. In this regard, Manitok has engaged the services of Raymond James Ltd. to act as advisers in this process.
Manitok’s senior lender has agreed to extend its existing demand credit facility. The interest rate on the Corporation’s credit facility will be increased by 2% to prime plus 6% on average. The monthly repayment schedule on the credit facility is $300,000 per month, payable at the end of each month. The credit facility is subject to customary review on December 15, 2017.
Manitok is a public oil and gas exploration and development company focusing on Lithic Glauconitic light oil in southeast Alberta and Cardium light oil in west central Alberta. The Corporation utilizes its expertise, combined with the latest recovery techniques, to develop the remaining oil and liquids-rich natural gas pools in its core areas of the Western Canadian Sedimentary Basin.