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CALGARY, July 12, 2017 /CNW/ - Petro-Victory Energy (TSX-V: VRY), ("Petro-Victory" or the "Company"), is pleased to announce the proposed acquisition of a portfolio of non-operated production interests in Brazil from Empresa de Engenharia de Petróleo Ltda. ("ENGEPET") for an aggregate of US$1.9 million (the "Acquisition") to complement the current royalty interests in Paraguay.
Subject to approval from Agencia Nacional do Petroleo Gas Natural e Biocombustiveis of Brazil ("ANP") and the TSX Venture Exchange Inc. ("TSX Venture"), Petro-Victory will acquire certain working interests in Brazil comprising 12,850 gross acres across 3 basins with 2017 year end production estimated to be between 70-90 bopd net to Petro-Victory including: (a) a 50% equity in the Carapitanga onshore producing oil field in the Sergipe Basin; (b) a 30% equity in the Andorinha onshore producing oil field in the Potiguar Basin; (c) a 50% equity in the São João onshore oil field in the Barreirinhas Basin; and (d) a 30% equity in the Alto Alegre onshore oil field in the Potiguar Basin.
The consideration, US$0.9 million, includes all associated acquisition costs and US$1 million contribution to the upcoming capital expenditure program for the four concessions.
Local Brazilian Partner
Upon completion of the acquisition, Petro-Victory will enter into a partnership with ENGEPET (who will retain the remaining equity in all 4 concessions) where the two companies will work closely together to achieve the production goals set by both parties. ENGEPET is a Brazilian operating company with oil fields and service contracts across Brazil. ENGEPET currently operates their own oil and gas fields, as well as operating a number of oil fields for companies including Petrobras and GALP. ENGEPET maintain a strong relationship with ANP and Petrobras through their experienced staff and successful track record of developing oil fields throughout Brazil and are the ideal local operating partner for Petro-Victory as they enter into this new phase for the company.
Financing of the Transaction
In order to finance the Acquisition and upcoming expenditure program, Petro-Victory intends to complete a non-brokered private placement offering of common shares at a price of $0.05 per share for gross proceeds of up to CAD$4,000,000 (the "Offering"). No finder's fees are expected to be paid in connection with the Offering. All securities issued in connection with the Offering will be subject to a hold period of four months and one day from the date of closing. The net proceeds from the Offering will be used for the Brazil acquisition and general corporate purposes. Depending on market conditions, the Company reserves the right to increase the maximum gross proceeds under the Offering, subject to the approval of the TSX Venture.
Future News Flow
Following closing of the Acquisition (expected to close in August), the Company will release further information on its plans for the fields in the short and long term, including information on the estimated oil reserves, production forecasts, and future work programs. In the view of management all 4 oil fields have significant potential and will provide the Company with numerous opportunities to increase production going forward.
Further evaluations are currently ongoing on various new ventures and opportunities in Brazil, and the Company will update the market on further progress of these evaluations as they advance.
Message from the CEO
Richard Gonzalez, CEO, made the following comment: "We are very pleased to announce the acquisition of four oil fields located in Brazil. On completion, this acquisition will transform Petro-Victory into an oil producing company from day one. All four fields will offer Petro-Victory quick payback, positive cash flow, and certified reserves. Petro-Victory will now have a cash-flowing production base in Brazil that can be readily grown through low-risk development with our local partners. The acquisition of a low-risk, producing portfolio is a significant milestone for Petro-Victory. We will update the market on a regular basis as we progress on these fields and on a number of other opportunities that we are evaluating."
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Advisory Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory, including management's assessment of Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.
Specifically, this press release contains forward-looking statements relating to but not limited to: the offering, our business strategies, oil and gas production, plans and objectives, and drilling, testing and exploration expectations. These forward-looking statements are based on certain key assumptions regarding, among other things:, the completion of the offering; our ability to add production and reserves through our exploration activities; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labor and other industry services; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect.
Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. These and additional risk factors are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities regulatory authorities at www.sedar.com.
The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.
SOURCE Petro-Victory Energy Corp.
For further information: Petro-Victory Energy Corp., Richard F. Gonzalez, CEO - 817-838-1819; Petro-Victory Energy Corp., Mark Bronson, CFO and Corporate Secretary - 817-838-4744