HOUSTON, Aug. 01, 2018 (GLOBE NEWSWIRE) — via NetworkWire – Hunter Oil Corp. (OTCQX: HOILF; TSX-V: HOC) (the “Company”) is pleased to announce that it has agreed to sell (the “Transaction”) substantially all of its oil and gas operations (the “Assets”) to Pacific Energy Development Corp. (“Purchaser”), a Nevada corporation and a wholly-owned subsidiary of PEDEVCO Corp. (NYSE American: PED), an arm’s length, California-based oil and gas company.
The aggregate purchase price for the Assets is USD $21,315,636 (the “Purchase Price”), being approximately CAD $27,710,000.
The Purchase Price represents approximate gross proceeds of USD $1.63 (CAD $2.12) for each issued and outstanding common share of the Company (a “Share”) based on the 13,070,871 Shares outstanding.
The Company intends to distribute (the “Distribution”) the available portion of the Purchase Price after payment of liabilities and obligations to the holders of the Company’s Shares (“Shareholders”) as a return of capital following closing of the Transaction, as described below.
All CAD figures herein assume a USD/CAD exchange rate of 1.30.
The Transaction provides Shareholders with a significant premium to the present market valuation, payable in cash, and avoids the substantial dilution associated with raising the USD $20-30 MM management has estimated that initial field development would require. The Distribution provides Shareholders with an immediate cash distribution, while allowing Shareholders to retain their Shares.
The Transaction is structured as a sale of assets of the Company’s holding companies, Milnesand Minerals Inc., and Chaveroo Minerals, Inc, and a sale of shares of the Company’s operating companies Ridgeway Arizona Oil Corp. and EOR Operating Company. The Purchase Price is subject to certain normal course adjustments.
Closing of the Transaction is scheduled to occur on August 31, 2018. The Transaction is subject to the satisfaction of several conditions precedent including the approval of the Shareholders by special resolution (being 2/3 of the votes cast at the meeting), and the acceptance of the TSXV.
The board of directors of the Company has unanimously determined that the Transaction is in the best interests of the Company and is fair to the Shareholders and is unanimously recommending that the Shareholders vote in favour of the Transaction.
Certain directors and shareholders of the Company, who collectively own approximately 68% of the outstanding common shares of the Company, have agreed with the Purchaser to vote their shares in favour of the Transaction.
The Company plans to distribute substantially all of the available portion of the net proceeds of the Transaction to Shareholders as a reduction and return of capital (after payment of Transaction costs, the payment of all liabilities and obligations of the Company and retention of an amount to fund future working capital needs, estimated at USD $2,500,000). The distribution is planned to be effected as soon as practicable after closing of the Transaction.
It is anticipated that the Distribution to Shareholders subsequent to completion of the Transaction should be approximately USD $1.25 (CAN $1.625) per Share.
Upon completion of the Transaction, the Company will not have any significant active business operations or assets other than cash. Following completion of the Transaction and the Distribution the Company plans to seek to locate, evaluate and where advisable negotiate to acquire interests in additional oil and gas properties. There is no guarantee that the Company will be able to identify suitable oil and gas prospects, or that the Company will be able to negotiate acceptable terms for any prospects that it identifies. The TSXV may transfer the Company to the NEX, a separate board of the TSXV, if the Company fails to meet the ongoing minimum listing requirements of the TSXV.
Details of the Transaction and the Distribution, and the risks and procedures associated therewith, will be disclosed in greater detail in the information circular of the Company for the Shareholder meeting which the Company currently anticipates will be mailed to the Shareholders in August 2018 for an Annual General and Special Meeting of Shareholders to take place August 30, 2018.
Copies of the material agreements for the Transaction will be made available under the Company’s profile on SEDAR at www.sedar.com.