TORONTO, Canada, May 29, 2018. PetroMaroc Corporation plc (TSXV: PMA), an independent oil and gas company focused on Morocco (the “Company” or “PetroMaroc”) is pleased to announce its financial and operating results for the first quarter of 2018.
Commenting, Dennis Sharp, Chief Executive Officer of PetroMaroc, said: ‘‘During the quarter the Company repaid the principal and interest of the Cdn $11.09 million secured debentures in full, following which, the Company is debt free. Subsequent to the quarter-end, the Company disposed of its residual 4,658,705 Sound Energy plc ordinary shares, with the cash proceeds totaling Cdn $3.3 million. PetroMaroc continues to retain a material upside with its ownership of the Sidi Moktar Net Profit Interests. Sound Energy’s near-term Sidi Moktar work commitments include acquiring and processing 500 kilometres of 2D seismic and a short well test of the Koba-1 well, with the additional optional work programme commitments including two exploration wells with a minimum Liassic objective and acquisition and processing 150 square kilometres of 3D seismic. The Sound Energy work program is well conceived and PetroMaroc remains wholly supportive of management’s efforts and strategy”. “Following repayment of the secured debentures, cash balances held and the material upside of the Sidi Moktar Net Profits Interests, the Company is now carefully considering potential accretive business development opportunities”.
PetroMaroc today filed its financial statements for the quarter ended March 31, 2018, together with its Management’s Discussion and Analysis in respect of the Company’s financial results for the quarter ended March 31, 2018. These documents are available on the PetroMaroc website at www.petromaroc.co or under the Company’s profile on SEDAR at www.sedar.com.
- General and administrative costs in Q1 2018 totalled Cdn $0.21 million, a 20% decrease in comparison to Q1 2017 (Cdn $0.27 million).
- Cash as at March 31, 2018, Cdn $0.27 million (Cdn $0.77 million as at December 31, 2017).
- The Company’s Cdn $11.09 million secured debentures, principal and interest due and payable in full on January 31, 2018, as issued on December 31, 2016, were repaid in full during the quarter subsequent to the aggregated outstanding obligations under the Series 1, 10% secured convertible redeemable debentures (the “Series 1 Debentures”) and the Series 2, 15% secured redeemable debentures (the “Series 2 Debentures”), collectively the “Debentures”, owing under the Debentures on January 31, 2018 (the “Maturity Date”) was Cdn $9,783,218, comprised of Cdn $2,425,866 in respect of the Series 1 Debentures and Cdn $7,357,352 in respect of the Series 2 Debentures. The Company satisfied the obligations owing under the Debentures by transferring to the holders of the Debentures an aggregate of 11,284,801 ordinary shares of Sound Energy plc, and a cash payment of Cdn $272,729.
Subsequent to the quarter-end:
- In April 2018, the Company disposed of 2,000,000 Sound Energy Plc ordinary shares, at an average price of GBP 45 pence per share, with the cash proceeds totalling Cdn $1,611,740.
- In May 2018, the Company disposed of 2,658,705 Sound Energy Plc ordinary shares, at an average price of GBP 37 pence per share, with the cash proceeds totalling Cdn $1,704,510.
As at May 29, 2018 the Company’s cash balance is Cdn $3.4 million.
- Sidi Moktar onshore:
- The Company retains a 10% net profit interest in any future cash flows from the Kechoula structure within the Sidi Moktar licences, and the Company retains a 5% net profit interest in any future cash flows from structures within the Sidi Moktar licences other than the Kechoula structure.
- Zag onshore:
- The Company committed to its percentage share of further geophysical studies and the drilling of one exploration well, subject to receiving and approving a satisfactory proposal from San Leon Morocco Limited (the “Operator”), as per the terms of the “First Extension Period” as set out in the petroleum agreement (the “Zag Petroleum Agreement”) dated June 18, 2009 between Office National des Hydrocarbures et des Mines (“ONHYM”), the Operator and Longreach Oil and Gas Ventures Limited. Following the joint venture not completing the minimum work commitment of the First Extension Period, a twelve month extension to the First Extension Period was agreed by the joint venture to May 2016. During the twelve month extension the Company continued to seek a mutually agreed technical, commercial and financial proposal to reduce its financial exposure insofar as possible. In Q1 2017, ONHYM advised the Operator and the Company that the bank guarantee had been deemed forfeited, and in addition, that the joint venture should pay the residual penalty (Cdn$0.77 million [US$0.6 million] net to the Company), to ONHYM. The Company has accrued Cdn$ 0.77 million (US$0.6 million) based on its working interest in the joint venture but challenges its obligation to pay such amount and has notified ONHYM that a “force majeure” has occurred pursuant to the Zag Petroleum Agreement due to financial, commercial and operational challenges on the licence over a number of years. The Company will seek to work with ONHYM and the Operator to expedite a mutually agreed resolution, however reserves the right to preserve its rights, which may include legal arbitration.
- Previously capitalised costs, which were impaired in 2014, continue to remain impaired.
Notice of Annual and Special Meeting of Shareholders
The Company will hold its annual and special meeting of shareholders on Monday, June 25, 2018 beginning at 10:30 a.m. (Toronto time) at 77 King Street West, Suite 3000, Toronto, Ontario M5K 1G8, to:
1. receive the consolidated financial statements of the Corporation for the fiscal year ended December 31, 2017 and the auditor’s report thereon;
2. to re-appoint Deloitte LLP as the auditors of the Corporation for the ensuing year and authorize the directors to fix their remuneration;
3. to elect directors for the ensuing year;
4. to consider, and if deemed advisable, to pass, a special resolution approving the continuance of the Corporation under the Canada Business Corporations Act;
5. to consider, and if deemed advisable, to pass, an ordinary resolution approving the new By-Law No. 1 of the Corporation;
6. to consider, and if deemed advisable, to pass, a special resolution approving the name change of the Corporation to “PetroMaroc Corporation”; and
7. to consider, and, if deemed advisable, to confirm and ratify the rolling stock option plan of the Corporation.
The Corporation will consider any other business that may properly come before the meeting. The record date for determining the holders of the Corporation’s common share who are entitled to notice of, and to vote at, the annual and special meeting is the close of business on May 22, 2018.
PetroMaroc Corporation plc is an independent oil and gas exploration company. PetroMaroc holds net profit interests in the Sidi Moktar licence (onshore Morocco), which the Company considers to be a committed long-term partner who will work to unlock the hydrocarbon potential of the Essaouira region. PetroMaroc is a public company and its ordinary shares are listed on the TSX Venture Exchange under the symbol “PMA”.
Special Note Regarding Forward Looking Statements
This press release contains forward-looking statements. Such forward-looking statements relate to future events or the Company’s future performance. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “project”, “potential”, “targeting”, “intend”, “could”, “might”, “continue” or the negative of these terms or other similar terms. Forward-looking statements in this press release include, but are not limited to, statements regarding the strength of the ongoing relationship between the Company and Sound Energy, including the ability of the Company to leverage off Sound Energy’s operating capabilities in Morocco, the degree of success in connection with the proposed drilling of the Kechoula structure to prove the commercial viability of Sidi Moktar and the value of the net profit interests held by the Company thereon, the degree of success of Sound Energy’s seismic program to further delineate the area, the ability of the Company enter into potential accretive business development opportunities, the ability of the Company to negotiate with ONHYM to reduce its potential exposure in respect of the Zag concession, the completion of evaluations and processing and interpretation of data, the performance characteristics of the Company’s interests in oil and gas properties, capital expenditure programmes, supply and demand for oil, gas and commodities, prices for oil and gas, drilling plans, and realization of the anticipated benefits of acquisitions.
Forward-looking statements are only predictions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: unsuccessful test results to be conducted by Sound Energy in respect of the Sidi Moktar concession, the potential decline in the value of the shares in Sound Energy held by the Company which may impact upon the financial resources of the Company, the general economic conditions in Canada, the Kingdom of Morocco and globally; industry conditions, including fluctuations in the price of oil and gas, governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; risks inherent in oil and gas operations; political risk, including geological, technical, drilling and processing problems; unanticipated operating events which could cause commencement of drilling and production to be delayed; the need to obtain consents and approvals from industry partners, regulatory authorities and other third-parties; stock market volatility and market valuations; competition for, among other things, capital, acquisitions of reserves, undeveloped land and skilled personnel; incorrect assessments of the value of acquisitions or resource estimates; any future inability to obtain additional funding, when required, on acceptable terms or at all; credit risk; changes in legislation; any unanticipated disputes or deficiencies related to title matters; dependence on management and key personnel; and risks associated with operating in and being part of a joint venture.
Although the forward-looking statements contained in this press release are based upon factors and assumptions which management of the Company believes to be reasonable, the Company cannot assure that actual results will be consistent with its expectations and assumptions. Undue reliance should not be placed on the forward-looking statements contained in this news release as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. These statements speak only as of the date of this press release, and the Company does not undertake any obligation to publicly update or revise any forward-looking statements except as expressly required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of PetroMaroc in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933 (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.