OIL - Selat Panjang Update and Warrant extension
(TheNewswire)
December 6, 2022 – TheNewswire- Sonoro Energy Ltd (the “Corporation “ or“Sonoro”) (TSXV:SNV) provides an update onthe Selat Panjang project in Sumatra, Indonesia. The Corporation alsoannounces its application to extend its common share purchasewarrants.
Negotiations between the project partners, Sonoro andMenara Global Energi (“MGE”), to agree to terms by which MGEwould take a share position in Sonoro have been ongoing untilrecently. Unfortunately, MGE has indicated that it no longer isinterested in taking a share position in Sonoro or in pursuing anyrelationship with Sonoro that would permit Sonoro to cure the legacyissues and maintain an interest in the PSC. Sonoro is extremelydisappointed that after serious discussions and efforts over the pastmonths that both parties were unable to find a mutually beneficialstructure to advance the Selat Panjang Project.
Over the past three years since the Selat Panjang PSCwas awarded to the partners whereby Sonoro had provided the technicaland operational experience to qualify for the bid round and won thePSC with MGE providing financial qualifications Sonoro has continuedto attempt to negotiate with MGE the customary necessities toadvance the PSC in Indonesia. An industry standard Joint OperatingAgreement (“JOA”) was to be put in place, however MGE frustratedthese efforts despite Sonoro agreeing to many modifications toaccommodate MGE and the project. MGE further frustrated thepartnership on this PSC by completely going silent and ignoringSonoro’s efforts to move the project forward for almost two years.Little activity was completed on Selat Panjang over the initial threeyear period of the PSC and with only 23 months now remaining in theoriginal five-year term of the PSC Sonoro was concerned that even ifan agreement had been reached there was a substantial non-performancerisk on Selat Panjang with SKK Migas and PSC contractual commitments.
In June 2022, Sonoro announced re-engaging with MGE anda new MOU that had certain work items that would solve legacy issuesand put the project back on track. Over the past couple months MGE hasbegun re-completing wells, which expenditures are not included as aportion of the commitment under the PSC, which without a JOA, Sonorois unable to participate in, however Sonoro provided its technicaladvice to MGE in good faith.
Discussions between the parties have been happeningover an extended period and now appear to have concluded with nofurther resolution in sight to resolve the legacy issue. Sonoro is indefault on a convertible debenture and a loan agreement between Sonoroand MGE and MGE has a lien against Sonoro’s 25% participatinginterest in the project. MGE has previously proposed a settlementagreement that will resolve the outstanding issues related to thedefault including the foreclosure on the Sonoro’s interest in thePSC and it transfer to MGE. Sonoro may excute and deliver thesettlement agreement in the near future, however Sonoro continues toconsider all of its available legal options.
In the interim, the Company is exploring and discussingspecific other opportunities in and outside of Indonesia with thirdparties that may progress the Company’s activities in thehydrocarbon sector.
Mr. David Kirk, President and CEO of the Company hasinformed the Board of Directors that he will resign from the Companysubsequent to closure of the Selat Panjang partnership. The Board ofDirector’s appreciates all efforts Mr. Kirk has provided in anattempt to advance the project to MGE’s satisfaction.
Sonoro Warrant term extension
The Company has filed an application with the TSXVenture Exchange (“TSXV”) to amend the expiry date of 24,457,247common share purchase warrants previously issued by the Corporationand that had an expiry of December 31, 2022. The warrant term will beextended to May 31, 2023 which is the same term as the balance of theother warrants outstanding by the Company or 7 million warrants pricedat 10 cents per warrant. The amount and price of the warrants beingextended total 24,457,247 with pricing of 20,657,466 warrants at 7cents, 1,855,874 warrants at 7.5 cents and 1,943,907 warrants at tencents.
Forward-looking Statements
Certain information in this news release constitutesforward-looking statements under applicable securities laws. Anystatements that are contained in this news release that are notstatements of historical fact may be deemed to be forward-lookingstatements. Forward-looking statements are often identified by termssuch as "may," "should," "anticipate,""expects," "estimates," "seeks" andsimilar expressions. In particular, without limiting the generality ofthe foregoing, this news release contains forward-looking informationregarding the PSC.
Forward-looking statements necessarily involve knownand unknown risks, including, without limitation, risks associatedwith oil and gas exploration, development, exploitation, production,marketing and transportation, loss of markets, volatility of commodityprices, currency fluctuations, imprecision of reserve estimates,environmental risks, competition from other producers, inability toretain drilling rigs and other services, delays resulting from orinability to obtain required regulatory approvals, changes inlegislation including but not limited to income tax, environmentallaws and regulatory matters, and ability to access sufficient capitalfrom internal and external sources. Readers are cautioned that theforegoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance onforward-looking statements as there can be no assurance that theplans, intentions or expectations upon which they are placed willoccur. Such information, although considered reasonable by managementat the time of preparation, may prove to be incorrect and actualresults may differ materially from those anticipated. Forward-lookingstatements contained in this news release are expressly qualified bythis cautionary statement.
Additional information on these and other factors thatcould affect Sonoro's operations or financial results are included inSonoro’s reports on file with Canadian securities regulatoryauthorities and may be accessed through the SEDAR website(www.sedar.com) or by contacting Sonoro. The forward lookingstatements contained in this news release are made as of the date ofthis news release and Sonoro does not undertakeany obligation to update publicly or to revise any of the includedforward-looking statements, whether as a result of new information,future events or otherwise, except as expressly required by securitieslaw.
Neither the TSX Venture Exchange nor its RegulationService Provider (as that term is defined in the policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracyof this release.
For further information, please contact:
Sonoro Energy Ltd.
1 403 262 3252
www.sonoroenergy.com
This press releaseis not to be disseminated in the United States
Copyright (c) 2022 TheNewswire - All rights reserved.