Centaurus Announces Sale of Working Interest in Coiron Amargo Sur Este to Pan American Energy and Provides Corporate Update
Calgary, Alberta--(Newsfile Corp. - April 28, 2021) - Centaurus Energy Inc. (TSXV: CTA) (OTCQB: CTARF) ("Centaurus" or the "Company") announces that, through its subsidiary in Argentina, Madalena Energy Argentina S.R.L., it is has entered into an agreement to sell its working interest in the Coiron Amargo Sur Este petroleum block ("CASE") to Pan American Energy, S.L., Argentine Branch ("PAE"), the operator of the block, and that the Company has exited its activity and involvement in Curamhuele, Palmar Largo, El Chivil and Coiron Amargo Norte.
David Tawil, Interim CEO of Centaurus Energy, commented, "As a result of the transactions and activities, the Company has exited and monetized assets with relatively high development costs and limited or no current output, and allows Centaurus to move forward with a right-sized balance-sheet and a focus on production activities in core conventional assets, with lower cost, in a rising oil price environment."
Pursuant to the transaction with PAE, Centaurus will sell its remaining working interest (29%) in the Coirón Amargo Sur Este block (the Company previously sold 6% of its interest to PAE, see below), with an effective date of January 1, 2021, in return for consideration with a reference value of more than $51 million, including:
- satisfaction of all amounts owed by the Company under the Loan Agreement between PAE and Centaurus, dated December 7, 2016 (the "Loan Agreement"), and termination of the Loan Agreement, and
- payment to Centaurus, over time, of a 2.5% Overriding Royalty Interest (ORRI) over the net proceeds corresponding to the 29% interest being assigned to PAE, totaling $25 million.
The proposed assignment is subject to certain conditions precedent that are customary in this type of transaction.
Coirón Amargo Sur Este
On January 22, 2021, Centaurus transferred to PAE six percent (6%) of its working interest in CASE for an amount of $8.4 million, with retroactive effect as of July 1, 2020. The $8.4 million represented the value of cash call requests relating to the operating and capital expenditures for the period from April 2020 through December 31, 2020. Pursuant to the assignment agreement, Centaurus remedied its default under the UT Agreement with respect to the cash calls unpaid and cured its default under the Loan Agreement.
On March 16, 2021, the Company's exploratory permit relating to the Curamhuele block expired.
On January 15, 2021, the Company relinquished the Palmar Largo concession.
On February 2, 2021, the relinquished its El Chivil concession.
Coirón Amargo Norte (CAN)
Pursuant to the previous default notice from the operator of CAN, Vista Oil & Gas Argentina S.A.U. ("Vista"), on July 7, 2020, Vista and Gas y Petróleo del Neuquén S.A. held an operational committee meeting and agreed to Centaurus's exit from the joint venture.
About Centaurus Energy
Centaurus is an independent upstream oil and gas company with both conventional and unconventional oil and gas operations in Argentina. The Company's shares trade on the TSX Venture Exchange under the symbol CTA and on the OTCQB under the symbol CTARF.
FOR FURTHER INFORMATION, PLEASE CONTACT:
David Tawil, Interim Chief Executive Officer
phone: (646) 479-9387
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the outcome of the agreements noted above including the terms and conditions and completion of the proposed sale of the CASE property to PAE. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to management's perceptions of the anticipated terms, timeline and likelihood of the completion of the proposed transaction, operational matters, historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. There can be no assurance that such 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 Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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