Tribute Resources to sell all oil, natural gas assets
TRIBUTE RESOURCES Inc. has completed agreements in principle to sell all of its oil and natural gas produc t i on and natural gas storage assets. The sale of these assets will be completed by three separate transactions, each of which is described herein.
Firstly, Tribute will sell all of the oil and natural gas assets directly held by Tribute (including the former Magnum assets) to ON-Energy Corp., a related party (transaction No. 1). Secondly, Tribute will sell its 100-per-cent interest in Liberty Oil & Gas Ltd. to Clearbeach Resources Inc. and Budd Energy Inc., both related parties to Tribute (transaction No. 2). Thirdly, Tribute will sell the shares of Bayfield Resources Inc., a wholly owned subsidiary of the com pany which hol ds both the Bayfield and Stanley Ontario Energy Board-designated natural gas storage pools and all related rights thereto to, an arm’s-length purchaser (transaction No. 3).
The sale of these assets will enable Tribute to focus on its renewable energy projects within the tidal and marine sector and will provide working capital to continue with these development initiatives. The sales will also enable Tribute to access additional financing for its renewable energy projects that can only be sourced after the non-renewable assets have been divested.
A summary of the above-mentioned transactions follows. Transaction No. 1
The assets sold to ON include proven estimated oil reserves of 4,960 barrels and natural gas reserves of 896 million cubic feet with current production of 58 barrels of oil equivalent per day from 64 wells. The purchase price is $1,383,000. The purchase price will be paid by: (1) the assumption by ON of Tribute payables in the amount of $441,637 related to the purchased assets; (2) the partial assumption of the Pace Savings & Credit Union Ltd. short-term lines of credit of $925,000 on substantially the same terms; and (3) cash of $16,363.
The parties intend to close the transaction immediately upon receipt of final acceptance from the TSX Venture Exchange.
Sale of 100 per cent of the shares of Liberty to Clearbeach and Budd — transaction No. 2
Tribute will be selling all 7,707,945 issued and outstanding common shares of Liberty to Clearbeach and Budd as the purchasers. The sale price is $897,388. The sale price will be paid by: (1) the assumption by the purchasers of Tribute debt in the amount of $307,471; (2) the assumption of Tribute debt owing to the purchasers in the amount of $300,000; and (3) cash of $287,917. The Pace term debt in the approximate amount of $870,000 is a liability of Liberty and will remain with Liberty.
The parties intend to close the transaction immediately upon receipt of final acceptance from the TSX-V.
At the completion of the two transactions shown above, all Tribute security will be released from Pace as the debt is transferred to ON and Liberty.
The sale of assets to ON and the sale of shares of Liberty to Clearbeach and Budd, as contemplated herein by transaction No. 1 and transaction No. 2, are considered to be related party transactions. Both transactions require disinterested shareholder approval, and Tribute intends to obtain this approval by way of written consent. Transaction No. 3 Tribute will be selling all 100 issued and outstanding common shares of Bayfield Resources, a wholly owned subsidiary of Tribute, to an arm’s-length purchaser. The sale price is $1-million with an effective date of Aug. 31, 2017. The purchase price will be paid by: (1) the assumption by the purchaser of Bayfield debt to Tribute the amount of $996,000; (2) cash of $4,000 paid directly to Tribute.
Acquisition of Tocardo International BV
Further to Tribute’s press release dated Aug. 3, 2017, the proposed acquisition of Tocardo is subject to a number of conditions, including, without limitation: (i) the execution of a purchase and sale agreement between Tribute and all of the shareholders of Tocardo, which is currently being negotiated by Tribute and Tocardo; (ii) the disposition of its oil and gas assets such that Tribute will continue with a sole focus on the renewable energy industry; and (iii) final approval from the TSX-V. The completion of transaction Nos. 1, 2 and 3 will remove the non-renewable assets so that Tribute can move toward completing the proposed acquisition of Tocardo once the definitive agreement is fully negotiated and completed. Tribute will provide an update as soon as a defintive agreement has been entered into.
We seek Safe Harbor.
Karen Baxter condensed this news release (firstname.lastname@example.org).
James Jeffrey Crich, Jane Elizabeth Lowrie, Jack Theodorus Schoenmakers, Larry M Smith, Hans van Breugel
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