(All dollar figures are expressed in United States Dollars, unless otherwise noted)
CALGARY, Dec. 20, 2016 /CNW/ - Madalena Energy Inc. ("Madalena" or the "Company") (TSXV: MVN and OTCQX: MDLNF) announces that it has sold its CAD $3 million convertible debenture (the "Convertible Debenture") of Point Loma Resources Ltd. (TSXV: PLX) ("Point Loma") for cash proceeds of $522,000 (CAD $700,000). The Convertible Debenture was part of the consideration Madalena received when the non-core Canadian assets were sold effective May 1, 2016. The carrying value of the Convertible Debenture at September 30, 2016 was $1.9 million (CAD $2.6 million).
The balance of the consideration Madalena received for its Canadian assets was 6,244,814 common shares of Point Loma, 10% of which are currently free trading. The balance of the shares is escrowed and will be released at six month intervals commencing December 30, 2016. The carrying value of the Point Loma common shares at September 30, 2016 was $1.9 million (CAD $2.5 million).
The Company, as previously disclosed, has been experiencing liquidity challenges. The transaction at Coiron Amago Sur Este, which was announced on December 7, 2016, will, when closed, provide significant assistance to addressing the liquidity and working capital challenges the Company has been facing. Proceeds from the sale of the Convertible Debenture will also assist in this process.
About Madalena Energy
Madalena is an independent, Canadian headquartered, Argentina focused upstream oil and gas company with operations in four provinces of Argentina where it is focused on the delineation of unconventional resources in the Vaca Muerta shale, Lower Agrio shale and Loma Montosa oil plays. The Company is implementing horizontal drilling and completions technology to develop both its conventional and resource plays.
Madalena trades on the TSX Venture Exchange under the symbol MVN and on the OTCQX under the symbol MDLNF.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Information
The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance, in particular, but not limited to, with respect to matters related to addressing the Corporation's liquidity challenges. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The forward-looking statements in this news release are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements. Investors are encouraged to review and consider the additional risk factors set forth in the Company's Annual Information Form, which is available on SEDAR at www.sedar.com.
SOURCE Madalena Energy Inc.
For further information: Steven Sharpe, Interim President and Chief Executive Officer, Madalena Energy Inc., Phone: (403) 262-1901 (Ext. 1), [email protected]; Thomas Love, CA, VP, Finance and Chief Financial Officer, Madalena Energy Inc., Phone: (403) 262-1901 (Ext. 227), [email protected]