CGX Energy completes US$35 million loan agreement

Toronto, Ontario–(Newsfile Corp. – April 8, 2022) – CGX Energy Inc. OYL (“CGX“or the”Company“) announced today that following its March 10, 2022 press release, the Company has entered into the previously announced financing agreement for a US$35 million loan (the “Ready”) with Frontera Energy Corporation (“Frontier“) which will allow CGX to continue to finance part of its share of the costs related to the Corentyne block, the deep water port of Berbice and other budgeted costs, as agreed with Frontera.

Under the terms of the loan, as amended, the loan to CGX may be drawn down in installments on a non-revolving basis until September 10, 2023 or the date on which CGX has drawn down the maximum amount of the loan. . The loan, together with all accrued interest, will be due and payable on September 10, 2023, or such later date as Frontera determines 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 late payment interest. If the loan is extended by Frontera after September 10, 2023, 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 daily average amount of unused loan commitment in excess of US$19 million will be payable quarterly in arrears by CGX on the last business day of each fiscal quarter, during the collection period.

Subject to final approval by the TSX Venture Exchange, Frontera, at its sole discretion, at any time after July 31, 2022 through September 10, 2023 inclusive, may elect to convert all or a portion of the unpaid principal of the common stock loan from CGX at a conversion price equal to US$2.42 per common share (equivalent in US dollars of C$3.10 per common share), on condition that Frontera provides CGX with a 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 September 10, 2023. CGX is also obligated to repay the entire outstanding loan in the event where, without Frontera’s consent, it issues any security that would dilute Frontera’s current ownership in CGX, or one of its subsidiaries enters into a transaction the proceeds of which are used by CGX to pay its share of Wei- 1.

The maximum number of common shares of CGX that may be acquired by Frontera upon conversion of the principal amount of the loan is 14,462,809 million common shares of CGX. If the loan principal is fully converted, Frontera will 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 final regulatory approvals.

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.

NEITHER THE TORONTO STOCK EXCHANGE, THE TSX VENTURE EXCHANGE NOR THEIR REGULATORY SERVICE PROVIDERS (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TORONTO STOCK EXCHANGE AND THE TSX VENTURE EXCHANGE) ACCEPT RESPONSIBILITY FOR THE SUITABILITY OR ACCURACY OF THIS RELEASE.

Cautionary and 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 believes or anticipates will or may occur in the future (including, without limitation, statements regarding the exploration in Guyana). All information other than historical facts is forward-looking information. Forward-looking information reflects CGX’s current expectations, assumptions and beliefs based on information currently available to it and takes into account its experience and perception of historical trends. Although CGX believes 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. Actual results may differ materially from those expressed or implied by the forward-looking information, and even if such actual results are achieved or substantially achieved, there can be no assurance that they will have the anticipated consequences or effects on CGX. Documents filed by CGX 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 influence actual results. and such factors are incorporated herein by reference. Copies of these documents are available without modification by referring to CGX’s respective profiles 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 disclaims any intention or obligation to update any forward-looking information, whether as a result of future or other new information, events or results.

For more information, please contact: Hill-York Poon, Acting Chief Financial Officer at (832) 300-3200.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/119796


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