CALGARY, Alberta, Dec. 05, 2023 (GLOBE NEWSWIRE) -- Prospera Energy Inc. ("Prospera" or the "Company")
((TSX.V: PEI, OTC:GXRFF, FRA: OF6B, OF6B.SG, OF6B.F, OF6B.BE)).
Prospera Energy Inc. ((TSX.V: PEI, OTC:GXRFF, FRA: OF6B)) is a publicly traded energy company based in Western Canada, specializing in the exploration, development, and production of crude oil and natural gas. Prospera is continuing to execute the horizontal transformation and is attaining the expected results. Seven horizontals have been drilled with three more expected prior to year-end. Prospera also drilled the light oil slanted well, encountering structure and pay as anticipated. Accordingly, PEI anticipates achieving 2023 year-end exit rate of 1,800 boepd
GORR Financing
Prospera Energy Inc. is pleased to announce the successful completion of a $3,000,000 GORR financing. The GORR portion bears a 1% royalty on Prospera's revenue from its Cuthbert properties and is re-purchasable in 12 months for $3,480,000. The funds from the transaction will be used to conduct the horizontal well development program on the Company's Cuthbert properties.
The Company signed an arms-length Purchase and Sale, Overriding Royalty Agreement and Agreement to Purchase Royalty, all dated November 17, 2023 (together, the "Agreements"), for the sale of 1% royalty on Prospera's revenue from its Cuthbert properties. Funds will be advanced as follows:
- $1,000,000 upon closing;
- $1,000,000 to be paid within 10 days;
- $1,000,000 to be paid within 10 days from the first date of production of wells #8 and #9 in PEI's drilling program located in Cuthbert, Saskatchewan.
The Company has the right of first refusal to repurchase the royalty back for $3,480,000, subject to price adjustments, no later than November 30, 2025. In the event that the Company elects to purchase the GORR prior to October 1, 2024, the purchase price shall be $3,480,000. If closing occurs after November 30, 2024, and if royalty payments for any quarter does not exceed $250,000 per quarter prior to the closing date, the purchase price will increase by $139,200 for each of those quarters where the royalty payments were less than $250,000 per quarter.
The initial royalty rate of 1% up to and including November 30, 2024, jumps to 16% after November 30, 2024, up to and including May 31, 2025, and then to 22% after May 31, 2025, if the royalty interest has not been repurchased. Failure to remit royalty payments will result in the Company paying, in addition to those funds, interest at 18% per annum, compounded monthly.
As a part of White Tundra's business development initiatives supporting Prospera, Shubham Garg assisted in coordinating the placement with the investor group. Neither White Tundra nor Shubham Garg was paid any finder's fee or warrants in this transaction.
Debt Financing
Additionally, Prospera Energy announces a clarification to the closing of its private placement, as a total of $583,000 was raised (previously $580,000 was announced). Prospera intends to use the net proceeds of the debt financing with an equity bonus and the GORR financing for development capital (including covering default partner portion) – drilling, completion, and tie-in, well abandonment & reclamation costs, and ongoing ESG initiatives.
The debt financing with an equity bonus was previously announced in press releases dated September 27, 2023, November 1, 2023, and November 9, 2023, with the below terms:
Debt Term Sheet
Issue: | Low-dilutive offering (the "Offering") of debt financing with equity bonus. |
Equity Bonus: |