Calgary, Alberta – Petro Viking Energy Inc. (“Petro Viking” or the “Company”) is pleased to report the Company’s continuing progress towards the closing of the proposed asset purchase of 100% of 611890 Alberta Inc.’s interests in 53,835 Acres, 43,935 Acres (Net), of mineral rights, associated wells, pipelines and facilities for the purchase price of $50,664,000 CAD and the subsequent name change of the Company (the “Acquisition”), previously announced on June 14, 2021.
At the Annual General and Special Meeting, held on October 15, 2021, the Company approved the amendment of the Company’s articles to give effect to a name change of the Company to Avila Energy Corp. or any such name as is authorized by the board of directors of the Company, acceptable to the Canadian Stock Exchange and applicable regulatory authorities on or about the closing.
The Purchase Price for the Acquisition is being satisfied by way of the issuance of 44,440,000 Class A common shares (the “Common Shares”) at a price of $0.60 per share and 30,000,000 convertible preferred shares (the “Convertible Shares”), convertible at a price of $0.80 per share. The Convertible Shares shall have a term of five (5) years and earn an accruing annual dividend at a rate of two percent (2%), payable upon conversion. The conversion of the Convertible Shares at the election of the holder can only occur after one of three milestones has been achieved: a) the Company exceeds the production rate of 3,000 boe/d, b) the Common Shares trade at a volume weighted average price (VWAP) of more than $1.00 per share for twenty (20) consecutive business days or c) the second year anniversary since the issuance of the Common Shares has occurred. At maturity upon the fifth anniversary of their issuance, the Convertible Shares shall automatically be redeemed on a 1:1 basis along with any accrued dividends by the issuance of Common Shares.
Closing is anticipated to occur upon completing the filing of all necessary documentation and the receipt of a Consent Resolution passed by a majority of not less than two thirds (2/3) of the votes cast by the shareholders of the Company. Closing also remains subject to the execution of all related applications and approvals necessary, as would be customary within the industry, and the final approval by all regulatory bodies, including the Canadian Securities Exchange (the “CSE”).
Clarification on the June 14, 2021, Press Release
Furthermore the Company wishes to clarify that the disclosed metrics, reserves, NPV and locations for the Acquisition were internally prepared effective April 1st, 2021, by the Company and not by or under the direct supervision of a Qualified Reserves Evaluator (“QRE”), as required under section 5.2 of National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and was not prepared in accordance with the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”).
Therefore, the Avila Asset disclosure of reserves and other oil and gas information announced on June 14, 2021, does not meet the requirements of NI 51-101, specifically section 5.2, and was not prepared in accordance with the COGE Handbook. The reserves and other oil and gas information associated with the Acquisition disclosed in the above-mentioned news release cannot be relied upon for the aforementioned reasons.
The Company continues its efforts with the CSE and the Alberta Securities Exchange (the “ASC”) to obtain all necessary regulatory approvals in connection with the previously announced acquisition of assets from 611890 Alberta Inc., which would ultimately allow for the resumption of trading of the Company’s common shares on the CSE. To the knowledge of the Company’s management, there are no material circumstances that could adversely affect delays in relation to which such approvals are obtained. As part of the approval process, the Company intends to circulate and execute a consent resolution by its shareholders in connection with the Acquisition upon receipt of the approval by the CSE and ASC of the form of the resolution to be circulated.