CGX and Frontera Announce US$35 Million Loan Agreement

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FUNDING SUPPORTS ADVANCEMENT OF JOINT VENTURE PLAN FOR CORENTYNE BLOCK AND OTHER ASSETS

TORONTO, March 10, 2022 /PRNewswire/ – Frontera Energy Corporation (TSX: FEC) (“Frontier“) and CGX Energy Inc. (TSXV: OYL) (“CGX“), joint venture partners (the “joint venture“) in the context of the oil exploration license for the Corentyne block offshore Guyana, announced today that they have concluded a financing agreement for a US company $35 million loan (the “Ready”) which will allow CGX to continue to finance part of its share of the costs related to the Corentyne block, the Berbice deepwater port and other budgeted costs, as agreed with Frontera.

“We are delighted to enter into this financing agreement in support of our joint venture as we build momentum for the construction of the Wei-1 exploration well in the second half of this year,” mentioned Orlando CabralesFrontera CEO. “These are exciting times for our joint venture and we look forward to working with our partner, CGX, as we build on our recent exploration success at the Kawa-1 exploration well and create value for our shareholders and residents of Guyana in one of the most exciting pools in the world.”

“The Kawa-1 exploration well represents a transformative discovery for CGX, in partnership with Frontera. With positive results and data supporting the 200 feet of net pay shown, we have de-risked our exploration program and can continue to move forward with our overall strategic plans, starting with Wei-1,” says the teacher Suresh NostrilExecutive Co-Chairman of CGX.We look forward to contributing to our positive momentum and creating value and opportunity for our stakeholders.”

The loan to CGX may be drawn down in tranches on a non-revolving basis until the earliest of the following: July 31, 2022 or the date on which CGX drew the maximum amount of the Loan. The loan, together with all accrued interest, will be due and payable July 31, 2022, or such later date as determined by Frontera in its sole discretion. Interest payable on the principal amount outstanding will accrue at a rate of 9.7% per annum payable monthly in cash, together with interest on default interest. If the loan is granted by Frontera beyond July 31, 2022, at its sole discretion, the new interest rate will be 15% per annum. The loan will be secured by all assets of CGX. A standby fee of 2% per annum multiplied by the average daily amount of unused commitment under the loan above US $19 million will be payable quarterly in arrears by CGX on the last business day of each fiscal quarter during the Draw Period.

Subject to the approval of the TSX Venture Exchange (“TSXV“), Frontera in its sole discretion, on or after July 31, 2022may elect to convert all or part of the principal amount of the loan, including accrued interest that has not been repaid, into common stock of CGX at a conversion price equal to US $2.42 per common share (i.e. the US dollar equivalent of Cdn. $3.10 per common share), provided that Frontera provides CGX with 15 business days notice of such conversion.

CGX has the right to prepay all or part of the Loan, including any unpaid interest, upon 15 business days notice to Frontera prior to July 312022. CGX is also required to repay the entire outstanding loan in the event that, without Frontera’s consent, it issues a security that would dilute Frontera’s current ownership in CGX, or one of its subsidiaries enters into a transaction whose the proceeds of which are used by CGX to pay its share of Wei-1’s authorized costs.

The maximum number of common shares of CGX that may be acquired by Frontera upon conversion of the loan principal only is approximately 14.46 million common shares of CGX. If only the loan principal was converted, Frontera would own approximately 77.93% of the currently issued and outstanding common shares of CGX (compared to its current ownership of 76.97%).

The loan remains subject to customary conditions, including receipt of all required regulatory approvals.

The transactions described herein between Frontera and CGX are related party transactions under Multilateral Instrument 61-101, but are exempt from the requirement to obtain formal valuation and minority shareholder approval. The material change report to be filed by CGX as part of this press release will contain the required information regarding these exemptions.

NOR THE TORONTO STOCK THE TSX VENTURE EXCHANGE, NOR THEIR REGULATORY SERVICE PROVIDERS (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TORONTO STOCK VENTURE EXCHANGE AND TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE RELEVANCE OR ACCURACY OF THIS RELEASE.

About CGX:

CGX is a Canada-based oil and gas exploration company focused on oil exploration in the Guyana-Suriname Basin and the development of a deepwater port in Berbice, Guyana.

About Frontera:

Frontera is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of petroleum and natural gas in South America, including related investments in upstream and midstream facilities. Frontera has a diversified portfolio of assets with interests in 34 exploration and production blocks in Colombia, Ecuador and Guyanaand pipeline and port facilities in Colombia. Frontera is committed to conducting its business safely and in a socially, environmentally and ethically responsible manner.

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Notice :

Caution Regarding Forward-Looking Statements.

This press release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information relates to activities, events or developments that CGX and Frontera believe or anticipate will or may occur in the future (including, without limitation, statements regarding the terms of the loan, the Guyana exploration program and obtaining regulatory approvals for the loan. All information other than historical facts is forward-looking information.

Forward-looking information reflects CGX’s and Frontera’s current expectations, assumptions and beliefs based on information currently available to them and takes into account their experience and perception of historical trends.

Although CGX and Frontera believe that the assumptions inherent in forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and, accordingly, undue reliance should not be placed on such information. Forward-looking information is subject to a number of risks and uncertainties, some of which are similar to those of other oil and gas companies and some of which are unique to CGX or Frontera. Actual results may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are achieved or materially achieved, there can be no assurance that they will have the anticipated consequences or effects on CGX or Frontier. Documents filed by CGX and Frontera from time to time with securities regulatory authorities (including Annual Information Forms for Fiscal 2021) describe risks, uncertainties, material assumptions and other factors that could affect actual results and such factors are incorporated herein by reference. Copies of these documents are available without change by referring to the respective profiles of CGX and Frontera on SEDAR at www.sedar.com. All forward-looking information speaks only as of the date on which it is made and, except as required by applicable securities laws, CGX and Frontera disclaim any intention or obligation to update any forward-looking information, whether whether as a result of future or other new information, events or results.

SOURCEFrontera Energy Corporation

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