PetroMagdalena announces shares for debt issuance
11 May 2012 - 7:08AM
PR Newswire (Canada)
TORONTO, May 14, 2012 /CNW/ - PetroMagdalena Energy Corp. announced
today that it has entered into an agreement to issue shares to
settle certain debt owed to Pacific Rubiales Energy Corp. in
connection with the exploration programs at the Topoyaco, Arrendajo
and Las Quinchas blocks. Luciano Biondi, Chief Executive Officer of
the Company stated: "This debt settlement transaction preserves our
working capital and cash balance, and improves our capital
structure. Existing cash balances are being used for our ongoing
exploration and development program and represent an effective use
of cash for shareholders, to support the growth potential of our
core oil assets." The Company owes Pacific Rubiales
U.S.$5,281,455.07 in connection with cash calls due in respect of
the Topoyaco, Arrendajo and Las Quinchas blocks. The shares for
debt agreement was negotiated at arms-length between the two
parties and concluded on May 10, 2012. The parties agreed to use
the 30-day volume weighted average price (VWAP) for the 30 days
prior to May 10, 2012. As a result, the shares for debt transaction
would be completed using a deemed share price of CA$1.29 per share.
As such, the Company will be issuing 4,097,839 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 19 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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