Prospera Energy Inc. (PEI): TSX: PEI-V; OTC(USA): GXRFF; FRA(Germany): OF6A (“Prospera” or the “Corporation”) announces that further to the Corporation’s July 21, 2022 and September 1, 2022 press releases, the Corporation has closed this acquisition of a 50% working interest in Brooks, AB and 100% of the non-op minority working interest of southern Saskatchewan properties from Cabaca Resources.
The Corporation agreed to purchase an undivided 50% working interest in exploration lands located near Cassels, Alberta for $302,000 payable by the issuance of that number of convertible debentures. The convertible debentures are convertible into common share units at the option of the holder at $0.075 during the first year and $0.10 during the second year, bear interest at 8% per annum, and are for a two-year term. Each unit consists of one common share and one warrant exercisable at $0.075 for two years from issuance, subject to the Corporation’s right to accelerate the expiry date if the common shares of the Corporation trade at $0.30 for a period of 20 consecutive days. Applicable interest will be payable in cash or shares at the then market price, at the option of the Corporation. Any such issuance of shares will be subject to TSX Venture Exchange (the “Exchange”) review and acceptance. The vendor in this transaction was a private Alberta corporation of which Sam David, the president of the Corporation, had an ownership interest. The Corporation’s independent directors negotiated the transaction and relied on exemptions contained is MI 61-101 in that the market value did not meet the 25% of the Corporation’s market cap.
The Corporation has the right to recomplete an additional well, on the basis of such costs being split equally with the Vendor. If successful, the Corporation will pay an additional $405,500 (half cash and half in common shares at the then 30-day weighted average price) to purchase a 50% interest in such well and lands. Share consideration is due 30 days after the successful resumption of oil production and is to be adjusted based on initial 30 days of production realized vs. reserves report documented production rate. Cash consideration is payable from PEI portion of net profit (paid after the fact) and subject to the same adjusted basis as the share consideration.
If the first Option is exercised, the Corporation will have the right to recomplete 2 further wells on the same basis. If successful, the Corporation will pay $1,776,000 on the same basis as above for a 50% working interest in the additional wells and property. Similar to the additional well recompletion (above), share consideration is due 30 days after the successful resumption of oil production and is to be adjusted based on initial 30 days of production realized vs. reserves report documented production rate. Cash consideration is payable from PEI portion of net profit (paid after the fact) and subject to the same adjusted basis as the share consideration.
The shares that may be issued pursuant to the options noted above will be issued based on the historical 30 day weighted average pricing of the Corporation’s shares on the Exchange. Any shares to be issued at a price of less than a deemed price of $0.05625 shall be subject to the approval of the Exchange.
