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G2 Energy receives notice of default from Cloudbreak
2023-01-20 18:48 ET - News Release
Mr. Slawek Smulewicz reports
G2 RECEIVES NOTICE FROM CLOUDBREAK
G2 Energy Corp. has received a notice of default from Cloudbreak Discovery PLC to the company and its subsidiary G2 Energy TX1 Inc. (G2 TX1) regarding a default under Cloudbreak's $2-million (U.S.) secured debenture related to default in payment of an interest instalment, which was due Dec. 31, 2022, among other alleged defaults. Cloudbreak holds second ranking security over the shares of G2 TX1 held by the company. G2 TX1 owns the Masten unit oil and gas producing property located in Texas.
Cloudbreak also alleged that G2 TX1 breached the debenture for failure to pay ad valorem taxes on the Masten project, which is not true because the taxes are not due until Jan. 31. 2023. Other alleged breaches relate to the company's negative working capital and maximum debt. The company is in discussions with Cloudbreak regarding an extension of time for the interest payment and other solutions, as well as better communication going forward . To reduce its working capital deficit, company is seeking to raise capital through an equity or debt private placement.
Management is also in discussions with the sellers of the Masten project (the sellers) related to the situation with Cloudbreak and options to prevent unnecessary enlargement of this issue. The sellers provided G2 TX1 with $1.6-million (U.S.) secured loan financing to finance a portion of the purchase price payable for the Masten project. The sellers were granted first ranking security over the property and assets comprised in the Masten project.
About G2 Energy Corp.
G2 Energy is a profitable junior oil and gas producer listed on the Canadian Securities Exchange. The company's primary focus is to acquire and develop additional overlooked, low-risk, high-return opportunities in the oil and gas sector. G2's strategy is to obtain a portfolio of risk-managed production and development opportunities onshore, United States. In May, 2022, G2 acquired the Masten unit in the Permian basin, Texas. The Masten unit is the company's first producing asset. G2 is targeting top-tier projects with operating netbacks and infrastructure facilities which will fast-track overall oil and gas production growth.