Magnum Energy Inc. Announces Disposition of Provost, Alberta Property
31 December 2013 - 12:00AM
Marketwired
Magnum Energy Inc. Announces Disposition of Provost, Alberta
Property
CALGARY, ALBERTA--(Marketwired - Dec 30, 2013) - MAGNUM ENERGY
INC. ("Magnum" or the "Corporation") (TSX-VENTURE:MEN) Magnum
announces that the Corporation has signed a purchase and sale
agreement (subject to certain closing conditions) with Artisan
Energy Corporation ("Artisan"), to sell Magnum's 50% working
interest in the Provost area of Alberta (the "Provost Asset").
The purchase price for the Provost Asset is $5,600,000, which
will be comprised of the following:
- assumption by Artisan of a $3,000,000 convertible debenture
currently held by Magnum (the "Magnum Debenture"), as amended and
subject to the approval of the debenture holders of the Magnum
Debenture;
- payment by Artisan of a $165,450 interest payment due to the
current holders of the Magnum Debenture (the "Interest Payment"),
through the issuance of common shares of Artisan at the same price
as a proposed financing to be undertaken in conjunction with this
transaction, which is subject to the approval of the debenture
holders of the Magnum Debenture. The issuance of shares by Artisan
is also subject to the filing, receipt of a prospectus and approval
of the TSX Venture Exchange. In the event that Artisan is unable or
does not issue the Artisan shares as contemplated in satisfaction
of the Interest Payment, the Interest Payment shall immediately be
payable by Artisan in cash to the holders of the Magnum Debenture.
The Interest Payment constitutes a non-refundable deposit by
Artisan with respect to the acquisition of the Provost Asset;
- a cash payment of $100,000, payable by Artisan to Magnum;
and
- a cash payment by Artisan in the amount of $3,334,550 against
the borrowing facility currently held by Magnum.
In addition, at closing, Magnum will issue a $1,000,000
debenture to Artisan (the "Artisan Debenture"). The Artisan
Debenture will have a term of 3 years, will bear an interest rate
of 9% per annum and will be non-convertible. Magnum will have the
right to early repayment of any portion of the Artisan Debenture
with no penalty. The Artisan Debenture will have a first security
position against all of the assets of Magnum and Magnum will not be
permitted to undertake any additional borrowing or subordination of
the Artisan Debenture without the prior consent of Artisan, such
consent not to be unreasonably withheld.
In addition to customary closing conditions, Artisan's
acquisition of the Provost Asset is conditional on Artisan
completing a minimum financing of $5,000,000. Closing of the
acquisition of the Provost Asset is anticipated to occur on or
before February 14, 2014.
Neither 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.
Magnum Energy Inc.,Richard NemethPresident &
CEO604.948.2688rnemeth@magnumenergyinc.comwww.magnumenergyinc.com
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