Altima to acquire $785,000 in oil, gas Alberta assets Altima to acquire $785,000 in oil, gas Alberta assets
2019-10-04 17:39 MT - News Release
Mr. Joe DeVries reports
ALTIMA ANNOUNCES AGREEMENT TO ACQUIRE OIL & GAS ASSETS AND THE ISSUANCE OF UP TO $6 MILLION IN CONVERTIBLE DEBT FINANCING
Altima Resources Ltd. has entered into an agreement to acquire from an arm's-length third party oil, gas and processing assets in the province of Alberta.
The assets are composed of a number of non-operated working interests and non-operated facility interests with third party processing revenues. The working interest and processing facility interests are in or servicing very long-life wells and units, most of which have been producing for many decades and have historically produced very large volumes of oil and gas. The assets have bookable reserves for well over a decade of continued production.
The vendor reports actual production volumes (unaudited) for the month of July, 2019.
Oil sales: 783 barrels
Gas sales: 16,327,000 cubic feet
Natural gas liquids sales: 1,223 barrels
Gross hectares: 9,689
Net hectares: 2,178
In consideration for the acquisition, the company has agreed to pay the vendor the sum of $785,000 in cash on closing. Closing is scheduled for October, 2019.
Altima further announces that it has launched a private placement to raise up to $6-million through the issuance of convertible debentures, subject to acceptance by the TSX Venture Exchange.
The company also confirms that existing debt of approximately $2.5-million in the company will be converted into debentures as part of the private placement, and therefore the private placement of debentures is expected to result in up to $3.5-million of additional proceeds to the company.
The debentures will be convertible at the option of the holder into units, each unit to be composed of one common share and one-half share purchase warrant, at a price of five cents per unit in the first year and thereafter at 10 cents per unit until the maturity date (three years from the issuance date).
Each full warrant entitles the holder to purchase one share for a period of two years from the closing date at a price of 15 cents per share.
The debentures will be transferable (subject to applicable securities laws) and will bear interest at 6 per cent per annum, maturing Sept. 30, 2022. Up to the maturity date, only interest on the debentures will be repaid, with the first semi-annual interest payment being due on March 31, 2020. The debentures may be prepaid at any time by the company after March 31, 2020. Any outstanding principal amount and accrued interest will be due and payable on the maturity date.
In the event that at any time after four months and a day from the date of issue of the debentures, the daily volume-weighted average trading price of the shares of the issuer on the TSX Venture Exchange is in excess of 15 cents over 30 non-consecutive trading days, the issuer will be entitled to deliver not fewer than 30 days prior written notice to the holders of debentures requiring each holder to elect as follows:
- To redeem all but not less than all of the outstanding principal amount of the holder's debentures and any accrued but unpaid interest;
- To convert all but not less than all of the outstanding principal amount of the holder's debentures and any accrued but unpaid interest to units at the conversion price per unit equal to: (i) 10 cents with respect to the outstanding principal amount of debentures; and (ii) the greater of 10 cents and the last closing price of the common shares of the issuer on the exchange on the day prior to conversion with respect to any accrued but unpaid interest.
If the applicable holder of debentures does not make such election within 10 days of delivery of the notice by the issuer to the holder, the issuer will be entitled to make the election.
In the event that, prior to the maturity date, the company receives from an arm's-length party a takeover bid or similar offer to acquire 20 per cent or more of the company's outstanding common shares or the company proposes to carry out a reorganization transaction under which shareholders of the company will, upon completion thereof, hold less than 51 per cent of the common shares of the resulting issuer, the company will be entitled to give notice to the holders of the debentures requiring, at the election of the debentureholder, the debentures either to be converted into units or the principal amount owing (and any accrued but unpaid interest thereon) to be paid out at the closing of the transaction
Proceeds will be used to finance acquisitions, capital expenditures and general corporate purposes.
The company has agreed to pay finders' fees of up to 6 per cent in cash and 6 per cent in warrants to qualified persons in accordance with exchange policies and subject to the requirements of applicable securities laws.
The financing is subject to acceptance for filing by the TSX Venture Exchange and any other regulatory approvals as may be required.
We seek Safe Harbor.
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