(TSX-V | OYL)
TORONTO, Oct. 10, 2014 /CNW/ - CGX Energy Inc. (TSX-V - OYL) ("CGX Energy" or the "Company") announced today it entered into a bridge loan agreement (the "Bridge Loan") with Pacific Rubiales Energy Corp. ("Pacific Rubiales") in the aggregate principal amount of Cdn.$7.5 million and provided an operational update on its activities in Guyana.
Dewi Jones, Chief Executive Officer of the Company, commented: "The Bridge Loan allows CGX Energy to continue discussions with potential joint venture partners and also commence purchasing long lead items required to drill our next exploration well on the Company's 100% owned Corentyne Block, offshore Guyana."
The Bridge Loan has a term of twelve months and annual interest payable of 5%. The net proceeds of the Bridge Loan will be used to cover certain expenses generated in Guyana in connection with its work commitments in Guyana.
The Bridge Loan is considered a "related party transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), but is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the transaction is less than 25% of the Company's market capitalization. The Company did not file a material change report more than 21 days before the closing of the Bridge Loan as required by MI 61-101 as the details of the Bridge Loan were settled only recently.
As previously announced, the Company has entered into a seismic contract with Prospector PTE. Ltd. ("Prospector") to conduct a 3,116.74 km2 3D seismic survey on the Company's 100% owned Demerara Block, offshore Guyana. The seismic survey commenced on and is expected to be completed in approximately 60 days. After the completion of the survey, Prospector will have been issued common shares ("Common Shares") in the capital of the Company representing approximately 16.6% of the Company.
Joint Venture Update and Corentyne Exploration Well Planning
The Company continue to work with the technical team at Pacific Rubiales to secure a joint venture partner on the Company's 100% owned Corentyne Block, offshore Guyana. The Company expects to spud the exploration well on the Corentyne Block by October, 2015.
Dewi Jones, Chief Executive Officer of the Company, noted: "We have been working closely with the technical team at Pacific Rubiales to delineate a prospect on the Corentyne Block and expect to announce the further details on our next exploration well by year-end."
On September 29, 2014, the Arbitral Tribunal of the London Court of International Arbitration granted CGX Energy a procedural order amending its claim against Repsol Exploracion, S.A. ("Repsol") to include a claim for amounts owing by Repsol to CGX Energy in the amount of U.S.$889,663 in connection with the drilling of the "Jaguar" exploration well on the Georgetown Block, offshore Guyana (the "New Claim"). The New Claim will be taken up after the January, 2015 hearing during the damages phase of the proceedings, if any.
About CGX Energy
CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin.
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.
This news release contains forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", anticipate", "estimate", "may", "will", "would", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur in the future. These forward-looking statements are based on certain key expectations and assumptions made by CGX Energy. CGX Energy believes the expectations and assumptions on which it develops forward-looking statements are reasonable; however, undue reliance should not be placed on forward-looking statements as there can be no assurance they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. In addition, other risks that may affect the forward-looking statements in this news release are outlined further in the Company's Annual Information Form dated March 5, 2014 filed on SEDAR at www.sedar.com.
The forward-looking statements contained in this news release are made as of the date hereof and CGX Energy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE: CGX Energy Inc.
For further information: Michael Galego, General Counsel and Secretary at (416) 843-3858 or [email protected]