VANCOUVER, British Columbia and ANKARA, Turkey, April 27, 2021 (GLOBE NEWSWIRE) -- Trillion Energy International Inc. (“Trillion” or the “Company”) (CSE: TCF) (OTC: TCFF) (Frankfurt: 3P2N) is pleased to announce it has signed a letter of intent (‘the LOI”) with a US investment fund (the “Investor”) to obtain up to USD $17,500,000 in new financing (“the Financing”), to finance the development of new producing gas wells on the SASB natural gas field, Black Sea. The LOI is subject to due diligence where the Company and Investor will diligently work towards definitive agreements to bring the financing to fruition. The planned Financing has three components as described below.
Overriding Royalty on Gas and Oil Production
A royalty sale for net proceeds to Company of USD $4,500,000 in exchange for an overriding royalty interest (“ORRI”) in the natural gas and oil production at both of the Company’s Cendere Oil Field and SASB Gas Fields. The ORRI is 5% on the Company’s net interest in the Cendere Oil Field production and 3% on the SASB Gas Field production net to Company. The ORRI is extinguished upon accumulated ORRI payments of USD $16,000,000.
Convertible Debt
The LOI includes a draw-down loan facility for up to USD $13,500,000, which will be repayable in equal installments over a thirty-six-month period and bears an interest rate of 13% per annum (“the Loan Facility”). The Loan Facility may be prepaid at the election of the Company after 12 months. Additional terms of the Loan Facility include:
A first advance on the Loan Facility in the amount of USD $16,000,0000 (the “First Advance”) payable immediately upon closing to be used for working capital, general corporate purposes and for funding development expenditures on the SASB gas field. The First Advance is convertible at the election of the Investor into the common stock of the Company at a fixed price of USD $.28/share during the term in which the Loan Facility is outstanding.
Subsequent advances on the Loan Facility for up to USD $9,500,000 available to the Company prior to, but not after the date that is 30 days prior to the maturity of the Loan Facility, and where each draw down by Company may not be less than USD $1,500,000. The Loan Facility advances may be used solely by the Company for the purpose of funding development expenditures on the Company’s assets located in the South Akcakoca Sub-Basin (ie the SASB Gas Field) and must be expended within twelve (12) months of each respective draw being made (“the Subsequent Advances”).
If a period of more than twelve (12) months passes without an advance being made on the Loan Facility and if any balance of the Loan is outstanding, either party may cancel the whole (but not less than the whole) of the unadvanced portion of the available Loan Facility upon fifteen (15) business days prior notice. A standby fee of 2.5% per annum is payable on the balance of the unused Loan Facility amount.
The Subsequent Advances (including all interest accrued thereon) may be converted at the election of the lender into Common Shares at a price per Common Share calculated in accordance with the rules and policies of the CSE Exchange equal to a 20% premium to individual daily volume weighted average prices calculated based on a VWAP for the last 30 days trading volume.
Other
The LOI is subject to, inter alia, satisfactory completion, preparation, and execution of definitive documentation, including a satisfactory due diligence review acceptable to the Company and Investor, and an agreed upon CapEx Plan for SASB development in advance.
Trillion’s CEO Arthur Halleran stated: “The combined debt and royalty financing is designed to realize the significant potential revenue stream from the SASB gas field and to minimize dilution to our existing shareholders from obtaining capital to do so. We are hopeful to close the financing and move forward into redevelopment this year.”
About the Company
Trillion Energy is an oil and gas producing company with multiple assets throughout Turkey and Bulgaria. The Company is 49% owner of the SASB natural gas field, one of the Black Sea’s first and largest scale natural gas development projects; a 19.6% (except three wells with 9.8%) interest in the Cendere oil field; and in Bulgaria, the Vranino 1-11 block, a prospective unconventional natural gas property.
For further information, please see our website: www.trillionenergy.com or email us: info@trillionenergy.com . The Company’s NI 51-101 and other reports relating to its reserves as of December 31, 2020 are filed on www.sec.gov, www.sedar.com , www.thecse.com , as well as the Company’s website.
Contact
Art Halleran: 1-250-996-4211
Corporate offices: 1-778-819-1585
e-mail: info@trillionenergy.com