/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH US NEWSWIRE SERVICES/
CALGARY, May 10, 2012 /CNW/ - Africa Hydrocarbons Inc. (TSXV: NFK) (AHI or the Company) is pleased to announce that it has entered into an engagement agreement with Canaccord Genuity Corp. (the Agent) in connection with a public offering on a commercially reasonable efforts basis of up to 55,600,000 common shares (the Common Shares) of the Company, at a price of $0.18 per share, for aggregate gross proceeds of up to $10,008,000 (the Offering).
The Company has agreed to pay the Agent a fee of 7% of the aggregate gross proceeds of the Offering. In addition, the Agent will be issued on the closing of the Offering agent options (the Agent Options) entitling the Agent to subscribe for Common Shares equal to 7% of the aggregate number of Common Shares issued under the Offering at an exercise price of $0.18 per Common Share. The Agent Options will expire 18 months after closing of the Offering.
The Offering is expected to close on or about May 29, 2012. The Offering will be completed by way of short form prospectus in each of the provinces of Canada other than Québec. The Offering is subject to customary conditions including the execution of a definitive agency agreement and receipt of applicable regulatory approvals. The Offering is also subject to the condition that, at the time of closing, the farmout agreement (the Farmout Agreement) dated November 2, 2011 between the Company's wholly owned subsidiary, Watutatu Inc. (Watutatu), and DualEx Tunisia Inc. (DualEx) still be in full force and effect.
Proceeds from the Offering will be used to fund the initial test well based on the newly acquired 3D seismic over the Bouhajla North Prospect in Tunisia. US$5,250,000 from the proceeds of the Offering will be used to pay the second instalment due under the Farmout Agreement and will be applied to the drilling of the initial test well. Proceeds are also anticipated to be used to acquire a minimum of 20 square kilometres of 3D seismic in order to fulfill the Phase 1 commitment over the recently awarded Bouhajla extension acreage as well for general and administrative expenses. Based on initial drilling results and additional data, any remaining proceeds may be used toward the drilling of one additional prospect on the Bouhajla block or identifying additional exploration or development opportunities in the region.
Annual Information Form
The Company is pleased to report that it has filed its Annual Information Form (AIF) for the year ended September 30, 2011 with the relevant provincial securities regulators. The AIF includes annual disclosure regarding reserves data and other oil and gas information as mandated by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities (NI 51-101). AHI's AIF has been filed on the SEDAR website at www.sedar.com.
Amendment to Farmout Agreement
On May 9, 2012, Watutatu and DualEx entered into an agreement pursuant to which the deadline for the payment of the second instalment of US$5,250,000 due under the Farmout Agreement was extended to May 29, 2012. Proceeds from the Offering will be used to pay the second instalment.
Amendment to Share Exchange Agreement
On May 7, 2012, the Company entered into an agreement (the Share Exchange Amending Agreement) to amend the terms of a share exchange agreement (the Share Exchange Agreement) dated November 30, 2011. The Share Exchange Agreement contained a provision that, provided certain milestones were met, the Company would issue an additional 16,000,000 Common Shares to the vendors under the Share Exchange Agreement. Pursuant to the Share Exchange Amending Agreement, provided that the Company completes a brokered financing with Canaccord Genuity Corp., the Company will not be required to issue the additional 16,000,000 Common Shares.
Extinguishment of Joint Venture Agreement
The Company entered into a dilution agreement dated effective May 3, 2012 with Anglo American Exploration (Canada) Ltd. (Anglo American) whereby the Company relinquished any and all rights it had under the joint venture agreement with Anglo American in respect to the West Raglan Project which is located in the Cape Smith Belt in northern Québec.
About the Company
Africa Hydrocarbons Inc. is a Canadian based oil and natural gas company involved in the acquisition, exploration and development of oil and natural gas properties.
Certain information set forth in this press release contains forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond management's control, including the receipt of third party approvals, including shareholder and regulatory approvals, the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve or resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources.
Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. No assurance can be given that any of the events anticipated will transpire or occur, or if any of them do so, what benefits will derive from them. Except as required by applicable securities laws, AHI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This press release, required by applicable Canadian laws, is not for distribution to U.S. News services or for dissemination in the United States, and does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein in the United States. These securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. Persons unless registered or exempt therefrom.
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 News Release.
ON BEHALF OF THE BOARD OF
AFRICA HYDROCARBONS INC.
For further information:
Suite 3000 Royal Centre, P.O. Box 11130
1055 West Georgia Street, Vancouver, British Columbia V6E 3R3
Tel: (403) 774-7225
Web Site: http://www.africahydrocarbons.com/