CALGARY, Oct. 27, 2015 /CNW/ - Petroamerica Oil
Corp. (TSX-V:PTA) ("Petroamerica" or the "Company"), an
oil and gas company operating in Colombia is pleased to announce that it has
entered into an agreement with AV Securities Inc. ("AV
Securities") to sell on a reasonable commercial efforts basis,
by way of private placement, units ("Units") of the Company
at a price of US$10,000 per Unit to
raise aggregate gross proceeds of up to US$20 million (the "Offering"). The Units
will be sold in two tranches, with the first tranche of 10,000
Units, or US$10 million, expected to
close on or about November 16, 2015,
extendable to December 16, 2015 at
the discretion of the Company, and the second tranche of 10,000
Units to close six months thereafter. AV Securities has
indicated that the funding for the first US$10 million is fully subscribed. The
Company may request that the second tranche be advanced at an
earlier date, subject to the approval of AV Securities. The Company
has received conditional approval with respect to the securities to
be issued under the Offering by the TSX Venture Exchange.
Ralph Gillcrist, President and
CEO of Petroamerica commented, "The Company plans to use the
proceeds raised to appraise and develop the Cumplidor field on the
PUT-7 block and to reactivate development activity in the
Suroriente fields in the Putumayo basin. This will allow the
Company to utilize its cash-on-hand, of which we currently hold
approximately $21 million (before the
receipt of the debenture funding), and cash flow from operations to
fund the drilling of a number of high impact exploration and
appraisal wells on the Company's acreage."
Each Unit shall consist of a senior secured debenture of the
Company with a par value of US$10,000
and bearing interest at a rate of 13.5% per annum, payable
quarterly with interest in arrears, with the first payment expected
to be due on December 31, 2015, (the
"Debentures") and 2,500 common share purchase warrants (the
"Warrants"). Each Warrant will entitle the holder to acquire
one common share of the Company ("Common Share"), and will
be exercisable at a price to be determined by the greater of (i)
the closing price of Common Shares on the TSX Venture Exchange on
the last trading day prior to the issuance of the respective
debenture tranche or (ii) the thirty day volume weighted average
trading price of Common Shares prior to the issuance of the
respective debenture tranche; plus a 20% premium to the applicable
price. Pricing and issuance of the Warrants are subject to
the approval of the TSX Venture Exchange. The Debentures will
mature 24 months from their respective issuance dates, however the
Company has the option to redeem the Debentures, in whole or in
part, at any time at par value. The Debentures will be secured by
the Company's property and will be senior to all other indebtedness
and liabilities of the Company.
The Units will be offered by way of private placement to
accredited investors in various foreign jurisdictions under
applicable securities laws as AV Securities and the Company may
agree. AV Securities may also engage an appropriately registered
sub-agent to offer Units by way of private placement to accredited
investors in the Province of Alberta and such other jurisdictions as AV
Securities and the Company may agree.
The First Tranche of the Offering is expected to be completed by
no later than December 16, 2015 and
is subject to certain customary conditions and regulatory
approvals, including the final approval of the TSX Venture
Exchange, and the entering into by the Company and AV Securities of
an agency agreement.
AV Securities, acting as the Sole Agent working with
Petroamerica to conduct the offering of the Units, will receive two
and a half percent (2.5%) of the gross proceeds raised, less any
proceeds raised for Units sold to individuals and entities
introduced to AV Securities by the Company. AV Securities
would also be entitled to receive warrants exercisable into up to
one million Common Shares at the same prices as the Warrants, with
up to 500,000 warrants issued on each of the first and second
tranche closing dates, based on the gross proceeds raised.
About Petroamerica:
Petroamerica Oil Corp. is a Canadian oil and gas exploration and
production company with interests in fifteen blocks, located in
Colombia's Llanos and Putumayo
Basins. Petroamerica's shares are listed on the TSX Venture
Exchange under the symbol "PTA".
Forward-Looking Statement:
This news release includes information that constitutes
"forward-looking information" or "forward-looking statements". The
forward looking statements contained in this document, including
expectations and assumptions concerning the obtaining of the
necessary approvals for the Offering, the anticipated closing date
of the Offering, the expected date of the first payment of interest
pursuant to the Debentures, and the expected use of proceeds from
the Offering are solely opinions and forecasts which are uncertain
and subject to risks. A multitude of factors can cause actual
events to differ significantly from any anticipated developments
and although the Company believes that the expectations represented
by such forward-looking statements are reasonable, undue reliance
should not be placed on the forward-looking statements because
there can be no assurance that such expectations will be realized.
Material risk factors include, but are not limited to: the risks of
the oil and gas industry in general, such as operational risks in
exploring for, developing and producing crude oil and natural gas,
market demand and unpredictable shortages of equipment and/or
labour; potential delays or changes in plans with respect to
exploration or development projects or capital expenditures;
fluctuations in oil and gas prices, foreign currency exchange rates
and interest rates, reliance on industry partners and the failure
to obtain the necessary approvals for the Offering or possible
delays in closing the Offering.
Neither the Company nor any of its subsidiaries nor any of
its officers, directors or employees guarantees that the
assumptions underlying such forward-looking statements are free
from errors nor does any of the foregoing accept any responsibility
for the future accuracy of the opinions expressed in this document
or the actual occurrence of the forecasted developments.
The forward-looking statements contained in this document are
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities
laws.
Neither the 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.
This press release shall not constitute an offer to sell or
the solicitation of an offer to buy the securities in any
jurisdiction. The securities have not and will not 3 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 in the United
States except in certain transactions exempt from the
registration requirements of the U.S. Securities Act and applicable
state securities laws.
SOURCE Petroamerica Oil Corp.