Petro Viking Energy Inc. announces the signing of a binding agreement to acquire 100% of Avila Energy’s interest in west-central Alberta for $ 50,664,000 and the subsequent name change of the Company to Avila Energy
Calgary, Alberta – The press wire – June 14, 2021 – Petro Viking Energy Inc. (“Petro Viking“or the”Company”) (CNSX: VIK.CN) is pleased to announce the proposed asset purchase of 100% of Avila’s interests in 53,835 acres, 43,935 acres (net), mineral rights, associated wells, pipelines and facilities for the price of purchase of CA $ 50,664,000.
The purchase price for the acquisition is satisfied through the issuance of 40,440,000 Class A common shares (the “Ordinary actions“) to $ 0.60 per share and 30,000,000 convertible preferred shares (the”Convertible shares”) Convertible at a price of $ 0.80 per share. The Convertible Shares will have a term of five (5) years and will pay an annual cumulative dividend at the rate of two percent (2%), payable on conversion. Conversion of convertible shares at the option of the holder can only take place after reaching one of the following three milestones: a) the company exceeds the production rate of 3,000 boe / d, b) the ordinary shares are trading at a Volume Weighted Average Price (VWAP) of more than $ 1.00 per share for twenty (20) consecutive business days or c) the second anniversary since the issuance of the common shares has occurred. Matures on the fifth anniversary of Upon issuance, the convertible shares will be automatically redeemed on a 1: 1 basis with all dividends accrued from the issuance of common shares.
Closing is expected to occur no later than October 31, 2021, subject to the signing of a full purchase and sale contract for the assets and remains subject to the execution of all necessary related requests and approvals as required. industry practice in conjunction with the submission of all necessary applications and approvals, including shareholders and the Canadian Stock Exchange.
Petro Viking commissioned Deloitte LLP in May to complete an independent interim assessment of its current reserves to include current production plus 4 proven drill locations and 2 probable drill sites; 6 wells on a potential of 15 well sites. Following the completion of this work as announced on June 1, 2021, the Company began a further review and assessment of the joint venture business plan which included more than 50 existing wells and 150 additional proven locations operated by Avila Energy. Management and directors have determined that if Avila is interested, they will agree to acquire 100% of Avila’s assets owned and operated in west-central Alberta. It became evident to both management and Avila that the acquisition would be in the best interests of both parties to facilitate the swift implementation of the business plan for the benefit of the shareholders of both companies.
Leonard Van Betuw, President and CEO of Avila Energy, said: “We are very pleased with the outcome of the review of our partnership over the past few years. We are now on the verge of unleashing the full potential of a very deliberate plan to become a carbon neutral energy producer that was envisioned over 5 years ago by Avila.
“The multiple horizons of proven promising geological areas, pipelines and installed facilities are now converging on a plan to become a full-cycle economic dynamo for carbon-neutral power generation. Daniel Lucero said on behalf of the Petro Viking Board of Directors.
The summary of industry actions that form the basis of the purchase price of $ 50,664,000 is as follows;
– Production of around 2,000 boe / d at close with proven development plans underway to exit 2021 at a rate of 3,000 boe / d as of December 31 from around 60 wells with an average production rate 50 boe / day of low decline less than 10% of low cost conventional operations; bought for $ 16,888 per flowing boe.
– Exit 2021 capable of generating a net income of $ 23.90 per boe or $ 26,170,500 per year;
– 43,935 acres (net) of mineral rights containing several promising geological targets, including Belly River, Spirit River (Rex) Mannville, Ellerslie, Wabamum and Duvernay with more than 150 drill locations identified; purchased for $ 1,153 an acre.
– Total proven reserves of 15.3 million boe valued at a NPV of 10% 152,803,300 $; purchased for $ 3.31 per boe.
– Total Proven + Probable of 28.0 million boe evaluated @ NPV10% $ 326,826,800; purchased for $ 1.81 per boe.
– Decommissioning liability of less than $ 4,000,000 with limited obligations over the following 5 years.
Prior to Closing, the Company will seek the approval deemed necessary for the completion of the Acquisition and the formal change of its name to Avila Energy and the appointment of Leonard B. Van Betuw as Director and President and Chief Executive Officer. of the society. . The Company will fully embrace the plan to continue its current production of low cost natural gas and liquids in the region. At the same time, the Company continues to focus on the rapid development of these lands in combination with the completion of engineering and the implementation of its business plan and long-term vision of being an operator of leading as a fully integrated company Carbon neutral energy producer through the collective organic development of its resources that are 100% owned and operated in combination with additional investments and additional acquisitions.
Consulting and research fees, based on approved CSE guidelines, will be payable on closing to an arm’s length third party who assisted the Company in coordinating and negotiating this transaction.
About Petro Viking Energy Inc.
The Company is an emerging CSE publicly traded company (“VIK”) and, in association with its approved joint venture partner, Avila Energy is an energy producer, explorer and developer in Canada. At low price Carbon neutral energy producer in 2022 the Company will continue to achieve its results by focusing on the application of a combination of proven geological, geophysical, engineering and production techniques.
For more information, please contact: Lars Glimhagen, Chief Financial Officer Peter Nesveda, Vice President of Corporate Affairs and Investor Relations, or Leonard B. Van Betuw, of Avila Energy.
E-mail: [email protected]
President and CEO
Caution Forward-looking information:
This press release contains forward-looking statements relating to the Company’s future operations and other statements which are not historical facts. Forward-looking statements are often identified by words such as “will”, “may”, “should”, “anticipate”, “expect” and similar expressions. All statements other than statements of historical fact included in this press release, including, without limitation, statements regarding the future plans and objectives of the Company are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and that actual results and future events could differ materially from those anticipated in such statements. These factors include, but are not limited to: uncertainties associated with exploration and development; the ability to raise sufficient capital to finance exploration and development; changes in economic conditions or financial markets; increases in input costs; litigation, legislative, environmental and other legal, regulatory, political and competitive developments; technological or operational difficulties or the inability to obtain permits encountered in the course of exploration activities; and labor relations. This list is not exhaustive of the factors that may affect the Company’s forward-looking information. Important factors that could cause actual results to differ materially from the Company’s expectations also include the risks detailed from time to time in documents filed by the Company with securities regulations. The reader is cautioned that the assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those expected, due to many known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on forward-looking information. This information, although considered reasonable by management at the time of its preparation, may prove to be incorrect and actual results may differ materially from those anticipated. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release and the Company will publicly update or revise all forward-looking statements included as expressly required by Canadian securities laws.