Petro-Victory Energy Corp. - Further Clarification Regarding Disputed Default Notices and Audit

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CALGARY, Jan. 26, 2015 /CNW/ - Petro-Victory Energy Corp. ("Petro-Victory" or the "Company") (TSX-V: VRY)  

Highlights

• Petro-Victory has received many requests for further clarification of the Company's January 23, 2015 press release entitled "Notice of Disputed Default Notices and Audit of Operator" (President Energy is the Operator of the Company's asset in Paraguay, the "Operator" or "President").
• Petro-Victory adopted the position that the receipt of two notices of default from the Operator created an obligation to inform the public of the delivery of such notices, whether any claims asserted by or associated with such notices are consequential to the company or are valid and enforceable, or not.
• The validity of both notices of default issued by the Operator are being disputed by Petro-Victory and, the Company has executed it's rights to audit President's books and records maintained for the project joint accounts.

Details

As the Operator of Petro-Victory's Pirity Concession in Paraguay, from time to time, President Energy has the obligation to provide "cash calls" to Petro-Victory to request funding for the Company's estimated share of project expenditures.  Since inception in May 2014 and continuing through early December 2014, the Company timely funded all cash calls for expenditures made in accordance with the approved work program and budget. 

The relationship between Petro-Victory and the Operator is governed by a certain International Operating Agreement, which includes special provisions for cash calls pursuant to "Overexpenditures," provided however, that the terms that govern such Overexpenditures are met. The two disputed notices of default issued by President Energy allege their basis in unpaid cash calls for Overexpenditures, issued in the amount of approximately $1.5 million dollars, in total.  

On December 1, 2014 Petro-Victory delivered a notice of audit to President Energy for the years 2013 and 2014, amidst concerns over the alleged continuing cash demands of the Operator in excess of the approved work program and budget.  The Company has engaged experts skilled in the art of such audits who began their analysis of the project electronic records during the first week of January 2015.  Additional audit field work is scheduled to commence February 2, 2015. Audit parameters include the timing of transactions and cash calls, intercompany billings, overhead allocations, the nature of significant Overexpenditures, payments to related parties, and other areas of potential concern regarding the propriety of the use of joint funds.

Petro-Victory believes it is in the best interest of both parties and the Republic of Paraguay to resolve the matters at hand expediently and to that end, has provided its premises for dispute to President for discussion.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.

Cautionary Note

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.

Advisory Regarding Forward-Looking Statements

In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory, including management's assessment of Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.

Specifically, this press release contains forward-looking statements relating to but not limited to: dispute resolution, our business strategies, plans and objectives, and drilling, testing and exploration expectations. These forward-looking statements are based on certain key assumptions regarding, among other things: our ability to add production and reserves through our exploration activities; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect.

Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. These and additional risk factors are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities regulatory authorities at www.sedar.com.

The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does 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 may be required by applicable securities law.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

SOURCE Petro-Victory Energy Corp.

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Petro-Victory Energy Corp., Richard F. Gonzalez, CEO - 972-239-3084; Petro-Victory Energy Corp., Mark Bronson, CFO and Corporate Secretary - 817-838-4744; Brisco Capital Partners Corp., Scott Koyich, - 403-619-2200