CALGARY, June 11, 2013 /PRNewswire/ - (TSX-V: PFC)
- PetroFrontier Corp. ("PetroFrontier") is pleased to announce that
it has agreed to amend the existing farmin agreement with Statoil
Australia Oil & Gas AS ("Statoil") whereby Statoil has
committed to spend the next US$50
million throughout the remainder of 2013 and 2014 to fully
fund up to a 385 km 2D seismic program and the drilling and
stimulation of four to six vertical test wells (the "Amended Farmin
Agreement").
Throughout 2012 and the first half of 2013, PetroFrontier and
Statoil jointly spent approximately US$30
million on exploration in the Southern Georgina Basin,
thereby gaining valuable geological information. Under the Amended
Farmin Agreement, Statoil could spend a total of up to US$175 million by the end of 2016 before
PetroFrontier will be required to contribute further. Statoil will
also become the operator effective September
1, 2013.
"We have worked with our financial advisor, GMP Securities L.P.,
over the past five months reviewing various strategic opportunities
and feel that we have reached a transaction best representing the
interests of our shareholders," said Paul
Bennett, President and CEO of PetroFrontier. "We are very
pleased that Statoil is clearly interested in the exploration of
the Southern Georgina Basin. Its commitment to further explore the
basin is a very positive indication of their belief in the
prospectivity of the area. In addition, while retaining a
significant working interest, we eliminate our US$10 million capital commitment and our need to
raise additional financing."
"We believe the Southern Georgina Basin asset to be potentially
very prospective and we are happy to assume operatorship for this
14 million acre area. This deal is in line with our exploration
strategy where we pursue access early and at scale to de-risk the
plays and grow organically through exploration activities. We will
continue the good work done by PetroFrontier with the aim of
clarifying the prospectivity", said Vice President Vidar Skjæveland in Statoil's onshore
exploration unit.
With working capital of approximately $11.3 million at March 31,
2013, no debt and reduced operating expenses going forward,
as a result of the Amended Farmin Agreement, PetroFrontier is now
positioned for new growth opportunities.
Under the terms of the Amended Farmin Agreement, up to the next
US$160 million of exploration costs
will be fully funded by Statoil over three phases to the end of
2016, in return for 80% of PetroFrontier's working interest ("WI")
in EP 103/EP 104 (100% WI), EP 127/EP 128 (75% WI) and EPA 213/EPA
252 (100% WI) in the Southern Georgina Basin, Northern Territory,
Australia (collectively the
"Permits").
- Phase 1 & 2A (2013 and 2014):
-
- Statoil will spend the next US$50
million on exploration (PetroFrontier - nil) and assume
operatorship on September 1, 2013
- At the end of Phase 2A, Statoil will have the option to
continue to Phase 2B; if Statoil elects not to continue, it must
return to PetroFrontier 50% of its former WI in the Permits, such
that ownership will then be: Statoil (30%), PetroFrontier
(70%)
- Phase 2B (2015):
-
- Upon proceeding to Phase 2B, Statoil will spend the next
US$30 million on exploration
(PetroFrontier - nil)
- At the end of Phase 2B, Statoil will have the option to
continue to Phase 3; if Statoil elects not to continue to Phase 3,
then it must return to PetroFrontier 25% of its former WI in the
Permits, such that ownership will then be Statoil (55%),
PetroFrontier (45%)
- Phase 3 (2016):
-
- Upon proceeding to Phase 3, Statoil will spend the next
US$80 million on exploration
(PetroFrontier - nil)
- At the end of Phase 3, Statoil will own 80% and PetroFrontier
will own 20% of PetroFrontier's former WI in the Permits
At the end of Phase 3, Statoil will have completed its funding
obligations under the Amended Farmin Agreement and the sharing of
future costs between Statoil and PetroFrontier will be based on
their then respective ownership interests.
These amendments are subject to satisfaction of certain
conditions precedent, including the approval of the Foreign
Investment Review Board of Australia and the approval of the TSX Venture
Exchange. Upon satisfaction of the conditions precedent (expected
to be satisfied on or before July 1,
2013), PetroFrontier's strategic review process announced on
December 4, 2012 will have been
successfully completed.
About Statoil ASA
Statoil is an international technology-oriented energy company
focused on upstream oil and gas operations and currently produces 2
million barrels of oil equivalents per day. Statoil has high
ambitions for international growth and is active in 35 countries
around the world. Statoil's shares are listed on both the Oslo Børs
("STL") and the New York Stock Exchange ("STO"). Statoil has a
market capitalization of around US$72
billion and has 23,000 employees worldwide.
About PetroFrontier Corp.
PetroFrontier is an international oil and gas exploration
company engaged in the exploration, acquisition and development of
both conventional and unconventional petroleum assets in
Australia's Southern Georgina
Basin where, prior to the Amended Farmin Agreement, it held an
approximate 85.5% working interest in 14.1 million gross acres.
PetroFrontier's common shares are listed on the TSX Venture
Exchange under the symbol "PFC". Founded in 2009,
PetroFrontier is one of the first companies to undertake
exploration in the Southern Georgina Basin in Australia's Northern Territory.
PetroFrontier's head office is based in Calgary, Alberta and its operations office is
in Adelaide, South Australia.
Forward-Looking Statements
This press release may contain forward-looking information
that involves substantial known and unknown risks and
uncertainties, most of which are beyond the control of
PetroFrontier, including, without limitation, statements pertaining
to its capital exploration program and management's future plans
and operations. All statements included herein, other than
statements of historical fact, are forward-looking information and
such information involves various risks and uncertainties. There
can be no assurance that such information will prove to be
accurate, and actual results and future events could differ
materially from those anticipated in such information. A
description of assumptions used to develop such forward-looking
information and a description of risk factors that may cause actual
results to differ materially from forward-looking information can
be found in PetroFrontier's disclosure documents on the SEDAR
website at www.sedar.com. Any forward-looking statements are made
as of the date of this release and, other than as required by
applicable securities laws, PetroFrontier does not assume any
obligation to update or revise them to reflect new events or
circumstances.
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.
SOURCE PetroFrontier Corp.