Decklar Resources Inc. (DKL-TSX Venture)
(
the “Company” or “Decklar”) is pleased to
announce that a private placement financing for a total of
approximately CAD $4 million is in the final stages of completion
that will enable the Company to immediately advance operational
activities to re-enter the Oza-1 well at the Oza Oil Field in
Nigeria. Closing of this private placement is expected to provide
sufficient funds to re-enter the Oza-1 well and to re-establish oil
production at the Oza Oil Field through the Company’s wholly-owned
Nigeria-based subsidiary, Decklar Petroleum Limited. The previously
announced debt funding plans are at final stages of being
concluded, which will provide additional development funding for
further operations and development drilling of the Oza Oil Field.
Private Placement of Common
Shares
The Company has arranged a private placement in
which approximately 14.4 million Decklar common shares will be
issued at a price of CAD $0.28 per share for total gross proceeds
of approximately CAD $4,032,000. The common shares to be issued as
a result of this private placement will be subject to a four-month
trading restriction. The private placement is expected to close by
the end of February 2021, and after issuance of the additional
common shares the Company will have total outstanding shares of
68,679,773. The private placement is subject to approval by the TSX
Venture Exchange. The majority of these funds will be used to
immediately proceed with the preparation and operations for the
re-entry of the Oza-1 well. The remainder of the funds will be used
for general corporate expenses. The Company may pay certain arm’s
length parties a finder’s fee in cash and/or common shares of the
Company in accordance with the policies of the TSX Venture
Exchange.
Oza-1 Well Re-Entry Plans and
Status
Civil works required for the Oza-1 wellsite are
complete, including rebuilding of the access road, construction of
a concrete drilling pad, a concrete mud pit, buildings, and other
facilities required for well re-entry and drilling operations and
management. A drilling rig located near the field has been
contracted and will be moved to the Oza-1 wellsite in the near
term, and operations to perform the planned re-entry of the Oza-1
well will begin shortly thereafter. The recently completed drilling
pad will be used for both the Oza-1 well re-entry and first
horizontal development well on the Oza Oil Field.
As previously reported, an export pipeline that
ties the Oza Oil Field production into the Trans Niger Pipeline
(TNP) and continues on to the Bonny Export Terminal, operated by
Shell Production Development Company (SPDC) is already in place.
Infrastructure also in place at the Oza Oil Field includes a lease
automatic custody transfer (LACT) unit fiscal metering system,
infield flow-lines, manifolds, and a rental 6,000 barrel per day
early production facility. These production and pipeline facilities
are intended to ensure that oil tested from the Oza-1 well re-entry
and early production will be immediately delivered and sold on an
expedited basis.
This is a significant milestone for the Company,
as it progresses from a junior development company to a
revenue-generating oil producer. Subsequent well re-entries and
additional development drilling at the Oza Oil Field further
supports the Company’s organic growth strategy.
Update Regarding Debt Funding Arrangements
The due diligence required to finalize the term
debt arranged with a Nigerian bank and the trading subsidiary of a
large multinational oil company active in Nigeria has continued to
progress, and the final report by the independent technical
consultant contracted to review reserve and production data and
financial projections was previously issued and has been reviewed.
The definitive loan documents are being finalized and are nearing
conclusion, with the Nigerian bank at final stages of concluding
the formal legal agreements. As previously announced, the remainder
of the US$7,500,000 for the subscription agreement with San Leon
Energy Plc remains in escrow and will be released upon satisfaction
(or waiver) of the final conditions precedent contained in the
agreement which is anticipated in the very near future.
Collectively, these funds will be sufficient for
the Company to execute full field development plans, which includes
re-entry and re-establishment of production from the remaining
existing Oza wells, in addition to new horizontal wells and
development wells at the Oza Oil Field.
For further information:
Duncan T. BlountChief Executive Officer Telephone: +1 305 890
6516Email: dblount@decklarresources.com
David HalpinVP Finance, Decklar Petroleum Telephone: +1 403 816
3029Email:davidhalpin@decklarpetroleum.com
Investor Relations: info@decklarresources.com
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Language
Certain statements made and information
contained herein constitute "forward-looking information" (within
the meaning of applicable Canadian securities legislation). All
statements in this news release, other than statements of
historical facts, including statements with respect to the Company
satisfying all outstanding conditions precedent in order to
complete the transaction with San Leon are forward-looking
statements. Such statements and information (together, "forward
looking statements") relate to future events or the Company's
future performance, business prospects or opportunities.
All statements other than statements of
historical fact may be forward-looking statements. Any statements
that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions
or future events or performance (often, but not always, using words
or phrases such as "seek", "anticipate", "plan", "continue",
"estimate", "expect, "may", "will", "project", "predict",
"potential", "targeting", "intend", "could", "might", "should",
"believe" and similar expressions) are not statements of historical
fact and may be "forward-looking statements". Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. The Company believes that the expectations reflected in
those forward-looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and
such forward-looking statements should not be unduly relied upon.
The Company does not intend, and does not assume any obligation, to
update these forward-looking statements, except as required by
applicable laws. These forward-looking statements involve risks and
uncertainties relating to, among other things, changes in oil
prices, results of exploration and development activities,
uninsured risks, regulatory changes, defects in title, availability
of materials and equipment, timeliness of government or other
regulatory approvals, actual performance of facilities,
availability of financing on reasonable terms, availability of
third party service providers, equipment and processes relative to
specifications and expectations and unanticipated environmental
impacts on operations. Actual results may differ materially from
those expressed or implied by such forward-looking statements.
The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. The Company
does not assume the obligation to revise or update these
forward-looking statements after the date of this document or to
revise them to reflect the occurrence of future unanticipated
events, except as may be required under applicable securities
laws.
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