Quattro Exploration and Production Ltd. (TSXV:QXP) is pleased to announce the signing of a Letter of Intent for the sale of certain oil and gas production, facilities and lands in western Canada to an Alberta-based oil and gas exploration and production company.
The aggregate purchase price for the acquisition is $24,250,000 including cash payments totaling $8,000,000, the issuance of $4,000,000 class A common shares at a price of $0.50 per common share, representing a minimum 12.5% of the seller’s common shares outstanding at closing and the assumption of estimated decommissioning liabilities totaling $12,250,000.
Based on Quattro’s independent 2015 year end reserve report, the oil and gas assets being sold represent 40% of the Quattro’s reserves and 35% of the Company’s lands. Production was averaging 700 boe/d and were assigned total proven reserves (1P) estimated at 2.68 million boe, valued at $22.5 million within a land base of 212,997 acres (gross) or 147,576 (net) acres.
All conditions for closing of the purchase of the Properties are anticipated to be completed on or about October 15th, 2016, with the Acquisition having an effective date of August 1, 2016, and is subject to a number of customary conditions including, but not limited to, completion of due diligence and approval of the TSX Venture Exchange.
‘Quattro intends to apply the proceeds from the sale to a combination of liabilities including trade payables, and a reduction in the term debt owing, with the balance of the proceeds materially improving the Company’s working capital and ability to continue to invest in its continuing operations in western Canada,’ said Leonard B. Van Betuw, President and CEO of Quattro. ‘As a result of the material equity holdings that Quattro will receive in the purchaser’s company, Quattro will be taking a pro-active approach to assisting with the purchaser’s seamless transition to becoming operator of the assets and the execution of ongoing development plans.’
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