Montana Exploration announces equity rights offering

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARY, Dec. 6, 2016 /CNW/ – Montana Exploration Corp. ("Montana Exploration" or the "Company") (TSXV: MTZ) today announced that it will be offering rights to holders of its common shares at the close of business on the record date of December 12, 2016, on the basis of one right for each common share held (the "Rights Offering").  Each four (4) rights will entitle the holder to subscribe for one common share of Montana Exploration Corp. upon payment of the subscription price of C$0.195 per common share.  There are currently 49,790,875 common shares of the Company issued and outstanding.  If all the rights issued under the rights offering are validly exercised, the Rights Offering will raise gross proceeds of approximately C$2.4 million. Vanco-Stock Ltd., a company controlled by a director of the Company, has given a written commitment to exercise its rights for proceeds of  $1,321,442.

The rights will expire at 4:30 p.m. (Toronto Time) on January 13, 2017 (the "Expiry Time"), after which time unexercised rights will be void and of no value.  Shareholders who fully exercise their rights will be entitled to subscribe for additional common shares, if available as a result of unexercised rights prior to the Expiry Time, subject to certain limitations as set out in the Company's rights offering circular. The Company expects to close the Rights Offering on or about January 13, 2017.

Details of the Rights Offering will be set out in the rights offering notice and rights offering circular which will be available under Montana's profile at www.SEDAR.com.  The rights offering notice and accompanying rights certificate will be mailed to each registered eligible shareholder as at the record date.  Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with the applicable funds, to the rights agent, Computershare Investor Services, Inc. ("Computershare"), on or before the Expiry Time. Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary. 

The Rights Offering will be conducted in Canada only.  However, certain holders of common shares in jurisdictions outside of Canada may be able to participate in the Rights Offering where they can establish that the transaction is exempt under applicable legislation.  If you are a holder of common shares and reside outside of Canada please see the rights offering notice and rights offering circular to determine your eligibility and the process and timing requirements to receive and, or, exercise your rights.  The Company requests any U.S. shareholder or other ineligible holder interested in exercising their rights to contact the Company at their earliest convenience.  

Funds raised through the Rights Offering will be used to pay for general and administrative (G&A) as well as geological, engineering and land (technical) expenses. The Company currently has G&A plus technical requirements of approximately $200,000 per month. The Company has taken steps to minimize its G&A and technical expenses while retaining sufficient resources to maintain the Company's lands and to conduct the Drilling Program announced on September 27, 2016. Actions to reduce G&A expenses have included signing an office lease extension to March 31, 2017 at a reduced rate, maintaining administrative staff on a four-day work week, delaying payment of executive salaries, and payment of consulting services through equity-based compensation.

The Rights Offering is part of a broader financial plan for the Company (the "Financial Plan") comprised of:

(1)

The Rights Offering governed by this Circular, for proceeds of up to $2.4 million;



(2)

The farm-out transaction, pursuant to which a Drilling Program is being conducted (the Company will also receive prospect fees of USD$250,000 in conjunction with the farm out)(see the September 27, 2016 press release);



(3)

Raising additional capital through the public markets to reduce or eliminate the working capital deficiency and to provide funds for further future drilling;



(4)

Pursuing other farm out transactions in respect to the Company's natural gas prospects and the remainder of the Company's Shaunavon prospects; and



(5)

The sale of non-core assets, including its Pine Mills field interests in Wood County, Texas, (see November 30, 2016 press release), and other non-core assets in the State of Montana.

ABOUT MONTANA EXPLORATION CORP.

Montana Exploration Corp. is an oil and gas exploration and production company focusing on the Shaunavon oil and Eagle gas opportunities underlying its extensive land holdings and drilling rights in the state of Montana. In the United States, the company operates through its wholly-owned subsidiaries, Montana Land & Exploration, Inc., GFP Texas Inc. and GFP Central USA Inc. The company's common shares are listed on the TSX Venture Exchange under the trading symbol "MTZ". Additional information regarding the company is available at www.SEDAR.com or at www.MontanaExplorationCorp.com.

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.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Forward Looking Statements

This press release contains statements that constitute "forward-looking information" or "forward- looking" statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should" "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. These forward-looking statements include, among other things, statements relating to: (i) the funds to be raised under the Offering; (ii) estimated costs of the Offering; (iii) available funds to the Corporation after expenses of the Offering; (iv) additional sources of required funding for the Corporation; (v) the use of the funds raised under the Offering; (vi) (vii) the particulars of the Financial Plan and the Corporation's ability to execute the Financial Plan or any portion thereof; and (viii) estimated G&A requirements.

Forward-looking statements and information contained in this press release are based on our current beliefs as well as assumptions made by, and information currently available to, us. Although we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.

By their very nature, the forward-looking statements included in this press release involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements.

Furthermore, the forward- looking statements contained in this press release are made as of the date of this document and we do 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 required by applicable law. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Montana Exploration Corp.

For further information: For further information about Montana Exploration, please contact: Charles Selby, Chairman and Chief Executive Officer, by telephone at +1.403.265.9091 or by mail at 2300, 144 4th Ave. S.W., Calgary, Alberta T2P 3N4.

RELATED LINKS
www.montanaexplorationcorp.com

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