(TSX-V | OYL)
TORONTO, Nov. 16, 2015 /CNW/ - CGX Energy Inc. (TSX-V - OYL) ("CGX Energy" or the "Company") announced today it has agreed to issue a convertible debenture (the "Debenture") by private placement in the amount of U.S.$1.5 million (the "Principal Amount") to Pacific Exploration & Production Corp. ("Pacific") at a conversion price of C$0.335. The proceeds of the Debenture will be used to cover certain expenses generated in Guyana in connection with its work commitments in Guyana and general corporate purposes.
Dewi Jones, Chief Executive Officer of the Company, commented: "We are very appreciative of Pacific's continued support of CGX Energy through this time of depressed oil prices. This short-term financing will allow the Company to continue to develop its asset base with a view to farming out working interests in each of the Corentyne, Demerara and Berbice blocks in light of Exxon's significant discovery offshore Guyana."
The Debenture has a term of twelve months and an annual interest payable of 5%. The Principal Amount will be funded in three separate tranches of U.S.$500,000 made from time to time by Pacific in its sole discretion. In the event that the Company fails to satisfy any of its obligations under the Debenture, Pacific shall have the right to take a pledge of shares in the Company's subsidiaries.
The Debenture is subject to final approval by the TSX Venture Exchange.
The Debenture is considered a "related party transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company will rely upon the formal valuation exemption in Section 5.5(a) of MI 61-101 and upon the minority approval exemption in Section 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the Debenture does not exceed 25% of the Company's market capitalization.
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 April 29, 2015 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]