Crown Point Energy Inc. (“Crown Point”) (TSXV: CWV), a
Calgary-based oil and gas company with Argentine upstream
conventional oil and gas assets, and Centaurus Energy Inc.
(“Centaurus”) (TSXV: CTA and OTCQB: CTARF), an independent,
Canadian company focused on Argentine upstream oil and gas
conventional and unconventional operations, are pleased to announce
that they have entered into a non-binding term sheet (the “Term
Sheet”) in which they propose to combine their businesses (the
“Proposed Transaction”) and create an operationally diversified,
financially strong, Argentina-focused oil and gas, exploration and
production company (the “Combined Company”). It is
currently intended that the Proposed Transaction be a 60/40
combination in favour of Crown Point, subject to adjustment
following due diligence.
The Combined Company would possess multiple
conventional oil-producing assets, a marquee, in-production Vaca
Muerta shale oil asset (Coiron Amargo Sur Este) and high-quality
exploratory assets. The Proposed Transaction would bring together
deeply connected and experienced industry, leadership and financial
professionals inside Argentina and in North America with access to
debt funding for upcoming development of Coiron Amargo Sur Este.
The Combined Company would also benefit from operational
efficiencies that are expected to lead to cost synergies.
In connection with the Proposed Transaction, the
leadership of the Combined Company would seek a local,
Argentina-listing of the Combined Company’s common shares.
The signing of the Term Sheet has been
unanimously approved by Crown Point’s and Centaurus’ board of
directors.
The Proposed Transaction is subject to a number
of conditions, including the satisfactory completion of due
diligence by both parties, the negotiation of a mutually
satisfactory arrangement agreement, and the receipt of shareholder,
TSX Venture Exchange and court approval. If the Proposed
Transaction proceeds, it would be expected to close early in the
second quarter of 2021. Further details regarding the Proposed
Transaction will be provided if and when the conditions contained
in the Term Sheet are satisfied and a definitive arrangement
agreement is executed by the parties.
The parties have agreed that the Combined
Company would have a combined management team and Board of
Directors, which would include: two co-CEOs, one of whom would be
David Tawil, the current interim CEO of Centaurus, and the other
would be appointed by Crown Point; a CFO and COO who would be
appointed by Crown Point; a seven member Board of Directors, four
of whom would be appointed by Crown Point and three of whom would
be appointed by Centaurus; a Chairman of the Board who would be
appointed by Crown Point; and a Vice-Chairman of the Board, who
would be appointed by Centaurus.
Crown Point’s CEO, Brian Moss, commented: “The
Proposed Transaction would create an organization with the
operational, managerial and financial capacity to be an important
player in the Argentina upstream sector. The Coiron Amargo Sur Este
is a world class unconventional asset that has the potential to
provide the Combined Company’s shareholders with profitable, stable
growth for many years.”
Centaurus’ CEO, David Tawil, commented: “We are
excited at the prospect of joining with Crown Point, an exemplary
operation with preeminent cornerstone investors, to create an
outstanding Argentina oil & gas exploration and production
company.”
Euro-Latin Capital is acting as the financial
advisor to Centaurus. TingleMerrett LLP and MBP Partners are acting
as legal counsel to Centaurus. Burnet, Duckworth & Palmer LLP
is acting as legal counsel to Crown Point.
About Crown
Point
Crown Point Energy Inc. is an international oil
and gas exploration and development company headquartered in
Calgary, Canada, incorporated in Canada, trading on the TSX Venture
Exchange and with operations in Argentina. Crown Point has a
strategy that focuses on establishing a portfolio of producing
properties, plus production enhancement and exploration
opportunities to provide a basis for future growth.
About Centaurus
Centaurus Energy Inc. (formerly Madalena Energy
Inc.) is an independent, Canadian company focused on Argentine
upstream oil and gas 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. Centaurus is implementing horizontal drilling and
completions technology to develop both its conventional and
resource plays.
Advisories
Forward-Looking Information
Certain information in this press release
contains forward-looking information. This information is based on
Crown Point's and Centaurus' reasonable assumptions and beliefs in
light of the information currently available to them and are made
as of the date of this press release. Actual results and the timing
of events may differ materially from those anticipated in the
forward-looking information as a result of various factors.
Information regarding the parties' expectations of future results,
performance, achievements, prospects or opportunities or the
markets in which they operate is forward-looking information.
Statements containing forward-looking information are not facts but
instead represent Crown Point's and Centaurus' expectations,
estimates and projections regarding future events or circumstances.
This press release contains forward-looking information concerning,
among other things, the following: the possibility of Crown Point
and Centaurus entering into a business combination, the intention
that the Proposed Transaction be a 60/40 combination in favour of
Crown Point, the potential benefits to be derived therefrom
(including operational efficiencies that will lead to cost
synergies), the composition of the Combined Company's board of
directors and management team, and the timing of closing; the
ability of the Combined Company to access funding for upcoming
development; the attributes of the Combined Company and its assets,
including that the Combined Company will be operationally diverse
and financially strong; and the intention to list the Combined
Company's common shares in Argentina. Many factors could cause the
parties' actual results, level of activity, performance or
achievements or future events or developments to differ materially
from those expressed or implied by the forward-looking statements,
including, but not limited to, the following: the possibility that
the Proposed Transaction does not proceed at all or that closing
thereof is delayed, whether because one or both of the parties is
not satisfied with the results of its due diligence, the parties
are unable to negotiate a definitive arrangement agreement, the
parties are unable to satisfy one or more of the conditions to
closing contemplated by the Term Sheet, the parties are unable to
obtain one or more of the approvals required to complete the
Proposed Transaction, or otherwise; the possibility that the
currently contemplated economics of the Proposed Transaction of a
60/40 combination in favour of Crown Point changes, whether as a
result of due diligence adjustments or other reasons; and the
possibility that the Combined Company is unable to raise the
capital required to fund its ongoing operations. With respect to
forward-looking information contained in this document, the parties
have made assumptions regarding, among other things: their ability
to satisfy the conditions to closing the Proposed Transaction set
out in the Term Sheet; the satisfactory completion of the parties'
due diligence; the ability of the Combined Company to raise the
capital required to fund the obligations of the Combined Company;
and the ability of the parties to obtain the receipt of applicable
third-party approvals. Readers are urged to consider the
uncertainties, risks and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such information. We have no intention and undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable securities law.
This press release is not an offer of securities
for sale in the United States. The securities described in this
press release have not been registered under the U.S. Securities
Act of 1933, as amended, and may not be offered or sold in the
United States or to, or for the account or benefit of, U.S. persons
(as defined in Regulation S under the U.S. Securities Act of 1933,
as amended) absent registration or an exemption from registration.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of the
securities in any jurisdiction where such offer, solicitation, or
sale would be unlawful.
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.
For Crown Point inquiries please contact:
Brian Moss
President & CEO
Ph: (403) 232-1150
Crown Point Energy Inc.
bmoss@crownpointenergy.com
Marisa Tormakh
Vice-President, Finance & CFO
Ph: (403) 232-1150
Crown Point Energy Inc.
mtormakh@crownpointenergy.com
For Centaurus inquiries please contact:
David D. Tawil
Interim CEO
Ph: (646) 479-9387
Centaurus Energy Inc.
davidtawil@ctaurus.com
Centaurus Energy (TSXV:CTA)
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