/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
KELOWNA, BC, April 21, 2014 /CNW/ - Georox Resources Inc.
("Georox" or the "Corporation") (GXR:TSX-V)
(OF6A:FRA) is pleased to announce that it has entered into a letter
of intent to acquire certain high working interest producing oil
and gas interests in Red Earth, Alberta, approximately 106 kms north of Lesser
Slave Lake (320 kms north west of Edmonton) from an arm's‑length corporation
(the "Red Earth/Otter Acquisition" or the
"Transaction") and to initiate a non‑brokered private
placement.
Red Earth/Otter Acquisition
The properties subject to the Transaction consist of working
interests in a total of 11.38 sections of land comprised of 2.125
sections in Red Earth that has nine producing oil wells and one
standing oil well in which Georox will acquire a 100% working
interest subject to reduction, in most instances, to a 97% working
interest after payout. In addition, Georox will acquire the
well bores to three abandoned wells in which it will hold a 100%
working interest in one and a 50% working interest in the two
others. In Otter, located 25 kms to the NW of Red Earth,
Georox will acquire a 100% working interests in 9.25 sections of
prospective land.
Georox will become the operator for all wells except two of the
abandoned wells.
At December 31, 2013, production
from the properties subject to the Transaction was approximately
113 boe per day (109 barrels of oil and natural gas liquids and 16
mcf/d of natural gas). Georox believes that there is an
opportunity to drill two additional wells at Red Earth and
potential beyond primary recovery through the implementation of
water flood/pressure support to significantly extend the life and
recoverable reserves from the Red Earth properties.
The purchase price for the Red Earth/Otter Acquisition is
approximately $6,100,000 with a
proposed effective date of April 1,
2014. The Transaction is expected to close the second week
of May.
The Transaction is subject to a number of customary conditions,
completion of satisfactory due diligence and receipt of regulatory
approvals(including TSX Venture Exchange approval), as well as
confirmation of bank financing. There is no assurance that
the Transaction will be completed, or completed as currently
described. The Transaction is expected to be funded from the
Corporation's working capital, the proposed private placement and
third party credit facilities.
Non-Brokered Private Placement
The Corporation will initiate a non-brokered private placement
(the "Private Placement") of up to 8,000,000 units of the
Corporation ("Units") at a price of $0.065 per Unit for aggregate gross proceeds of
up to $520,000. Each Unit shall
consist of one common share of the Corporation (a "Common
Share") and one-half of one Common Share purchase warrant (each
whole such warrant, a "Warrant"). The Warrants will
not be listed. Each whole Warrant shall be exercisable for one
Common Share at a price of $0.14 per
Common Share for the period to and including April 30, 2015. It is anticipated the
closing of the Private Placement will occur on or about
May 1, 2014.
All securities in the Private Placement will be subject to a
four month hold period from closing. Agents may be paid a
finder's fee of up to 10% of the aggregate subscription price plus
10% of the number of Units in brokers warrants with terms the same
as the Units for subscriptions secured by such agents pursuant to
the Private Placement.
Closing of the Private Placement is not subject to a minimum
aggregate subscription amount but shall be subject to receipt of
all required regulatory approvals, including the TSX Venture
Exchange.
The proceeds of the Private Placement are intended to be used in
connection with closing the Transaction and for general working
capital purposes.
The Units will be issued to purchasers pursuant to exemptions
from the prospectus requirements of applicable securities
legislation and will be subject to resale restrictions, as required
under the applicable securities legislation. After giving effect to
a fully subscribed Private Placement, Georox will have 35,146,185
Common Shares outstanding on a basic basis.
Any participation by insiders of the Corporation in the private
placement will be on the same terms as the arm's length investors.
It is anticipated that certain directors or officers will subscribe
for Units but in any event not in excess of 50% of the Private
Placement. The Corporation has no reason to believe that the
Private Placement will result in a change of control of the
Corporation.
Trading in the shares of the Corporation will be halted at the
request of the TSX Venture Exchange pending their receipt and
approval of satisfactory documentation pursuant to TSX-V Policy
5.3.
About Georox
Georox is a Canadian natural resource company engaged in the
acquisition, exploration and development of oil and gas properties
in Western Canada.
Production volumes are commonly expressed on a barrel of oil
equivalent ("BOE") basis whereby natural gas volumes are converted
at a ratio of six thousand cubic feet to one barrel of oil.
The intention is to convert oil and natural gas measurement units
into one basis for improved analysis of results and comparisons
with other industry participants. The term BOE may be
misleading, particularly if used in isolation. The conversion
ratio is based on an energy equivalent method and does not
represent an economic value equivalency at the wellhead.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements relating
to the future operations of the Corporation and other statements
that are not historical facts. Forward-looking statements are often
identified by terms such as "will", "may", "should", "anticipate",
"expects" and similar expressions. All statements other than
statements of historical fact, included in this release, including,
without limitation, statements regarding future plans and
objectives of the Corporation, are forward looking statements that
involve risks and uncertainties. There can be no assurance
that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in
such statements. More particularly, it contains
forward-looking statements concerning: (i) production (ii) planned
drilling, development and waterflood activities, (iii) the
potential number of drilling locations at certain of the
Transactions properties, (iv) timing and completion of the
Transaction, including expectations and assumptions concerning
timing of receipt of required regulatory approvals and the
satisfaction of other conditions to the completion of the
Transaction, and (v) potential development opportunities associated
with the Transaction.
Although Georox believes that the expectations and assumptions
on which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Georox can give no assurance that they will
prove to be correct. Since forward-looking statements address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks. These include, but are not limited to, risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures.
The reader is cautioned that assumptions used in the preparation
of any forward-looking information may prove to be incorrect.
Events or circumstances may cause actual results to differ
materially from those predicted, as a result of numerous known and
unknown risks, uncertainties, and other factors, many of which are
beyond the control of Georox. As a result, we cannot
guarantee that any forward-looking statement will materialize and
the reader is cautioned not to place undue reliance on any
forward-looking information. Such information, although
considered reasonable by management at the time of preparation, may
prove to be incorrect and actual results may differ materially from
those anticipated. Forward-looking statements contained in
this news release are expressly qualified by this cautionary
statement. The forward-looking statements contained in this
news release are made as of the date of this news release, and
Georox does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a
result of new information, future events or otherwise, except as
expressly required by Canadian securities law.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the Units in the United States. The Units (or constituent
securities) have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Georox Resources Inc.