PetroMagdalena Announces Shares for Debt Issuance
26 January 2012 - 11:30PM
PR Newswire (Canada)
TORONTO, Jan. 26, 2012 /CNW/ - PetroMagdalena Energy Corp. today
announced that it has entered into an agreement to issue shares to
settle certain debt owed to Pacific Rubiales Energy Corp. in
connection the exploration program at the Topoyaco block. Luciano
Biondi, Chief Executive Officer of the Company stated: "We have
taken many steps in 2011 to improve the Company's balance sheet and
preserve our liquidity to re-invest in our ongoing exploration and
development program in our core oil assets. This debt settlement
transaction eliminates the need for us to use our existing cash
balances to settle the remaining amounts owing to Pacific
Rubiales." The Company owes Pacific Rubiales approximately US$6
million in connection with a cash call due to Pacific Rubiales as
at December 31, 2011 for the Topoyaco exploration program. The
shares for debt agreement was negotiated at arms-length between the
two parties on January 19, 2012. Although the closing price of the
Company's common shares on the TSX Venture Exchange ("TSXV") on
January 18, 2012 was CA$1.10 per share, the parties agreed that the
shares for debt transaction would be completed using a deemed share
price of CA$1.25 per share. As such, the Company will be issuing
4,826,600 (calculated using the Bank of Canada exchange rate at the
close of January 19, 2012) common shares in settlement of the
above-noted debt. The issuance of these common shares is subject to
approval from the TSXV. PetroMagdalena is a Canadian-based oil and
gas exploration and production company, with working interests in
18 properties in five basins in Colombia. Further information can
be obtained by visiting our website at www.petromagdalena.com. All
monetary amounts in U.S. dollars unless otherwise stated. This news
release contains certain "forward-looking statements" and
"forward-looking information" under applicable Canadian securities
laws concerning the business, operations and financial performance
and condition of PetroMagdalena. Forward-looking statements and
forward-looking information include, but are not limited to,
statements with respect to estimated production and reserve life of
the various oil and gas projects of PetroMagdalena; the estimation
of oil and gas reserves; the realization of oil and gas reserve
estimates; the timing and amount of estimated future production;
costs of production; success of exploration activities; and
currency exchange rate fluctuations. Except for statements of
historical fact relating to the company, certain information
contained herein constitutes forward-looking statements.
Forward-looking statements are frequently characterized by words
such as "plan," "expect," "project," "intend," "believe,"
"anticipate", "estimate" and other similar words, or statements
that certain events or conditions "may" or "will" occur.
Forward-looking statements are based on the opinions and estimates
of management at the date the statements are made, and are based on
a number of assumptions and subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking statements. Many of these assumptions are based on
factors and events that are not within the control of
PetroMagdalena and there is no assurance they will prove to be
correct. Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
changes in market conditions, risks relating to international
operations, fluctuating oil and gas prices and currency exchange
rates, changes in project parameters, the possibility of project
cost overruns or unanticipated costs and expenses, labour disputes
and other risks of the oil and gas industry, failure of plant,
equipment or processes to operate as anticipated. Although
PetroMagdalena has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be
anticipated, estimated or intended. There can be 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. PetroMagdalena undertakes no
obligation to update forward-looking statements if circumstances or
management's estimates or opinions should change except as required
by applicable securities laws. The reader is cautioned not to place
undue reliance on forward-looking statements. Statements concerning
oil and gas reserve estimates may also be deemed to constitute
forward-looking statements to the extent they involve estimates of
the oil and gas that will be encountered if the property is
developed. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an
energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Estimated values of future net revenue disclosed do not
represent fair market value. 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 news release. PetroMagdalena
Energy Corp. CONTACT: Peter VolkGeneral Counsel and Secretary(416)
360-7915Belinda LabatteInvestor Relations Representative(647)
436-2152
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