December 18, 2013- Calgary, Alberta - Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE: CIL) announces that it has entered into a financial advisory agreement with Somerley Limited ("Somerley") to assist the Company with raising approximately $9.0 million.
Somerley is a specialist financial services company based in Hong Kong and one of the leading financial advisors on public and private transactions in China and Hong Kong. The terms of any capital raise have not been determined. The agreement generally provides for the payment of a fee on the successful completion of a transaction, but also provides for the payment of a one-time mobilization work fee in shares, subject to the approval of the TSX Venture Exchange. In accordance with the terms of the agreement, the Company has agreed to issue 313,610 common shares to Somerley for advisory services already rendered totaling USD$50,000 in accordance with the agreement, such shares being issued at the market price of the Company's common shares.
The issuance of the shares remains subject to approval by the TSX Venture Exchange.
Canoel intends to use a portion of the proceeds of any capital raise through Somerley to place on production several currently shut-in gas wells in Italy. Spot rates for natural gas production in Italy varied between CAD$13.64 and CAD$15.50 during 2013.
Additionally, management will allocate the majority of any capital raise through Somerley to initiate a drilling and development program on Canoel's 100% owned Comodoro Rivadavia property in Argentina. This property currently produces approximately 160 barrels of oil per day. Management notes that the Comodoro Rivadavia property has, to date, mostly produced from several shallow formations while deeper zones were not developed when oil prices were lower. Data compiled by the company has now enabled the technical staff to delineate several deeper locations. The cost of drilling and completing each well to deeper horizons is estimated to be approximately US$2.9 million. Further to this, the Company has recently become aware that the operator of permits adjacent to Comodoro Rivadavia has successfully drilled new deeper wells in close proximity to the Canoel lands. Several of these wells have been completed and have been placed on production.
Canoel's information about the newly drilled wells is from an independent source as of early December, 2013. At the present time, Canoel has not been able to confirm the official production rates from these wells, however the crude oil reportedly varies between 17.0 and 22.5 API. Canoel is unable to confirm whether the information about the adjacent property was prepared by a qualified reserves evaluator or auditor or in accordance with the COGE Handbook.
Certain information in this press release is forward-looking within the meaning of Canadian
securities laws as it relates to anticipated events and strategies. When used in this context, words
such as will, anticipate, believe, plan, mandated, intend, target, and expect or similar words suggest
Forward-looking information in this press release includes, among other things, information relating
to: (i) the Company's plans to raise approximately $9.0 million; (ii) the Company's plans to use the proceeds of that capital raise to drill and complete wells in Argentina; and (iii) the expected cost of drilling and completing each well.
These statements are based on certain assumptions and analyses made by the Company in light of its
experience, current conditions and expected future developments and other factors it believes are
appropriate. The material factors and assumptions used to develop these forward-looking statements
include, but are not limited to: (i) the ability of the Company to raise capital in sufficient amounts to be able to conduct the drilling and completion operations; (ii) the ability of the Company to source drill rigs and other services in Argentina to conduct the anticipated operations within the expected costs; and (iii) that the wells drilled will be successful with production being in commercial quantities.
Whether actual results, performance or achievements will conform to the Company's expectations
and predictions is subject to a number of known and unknown risks and uncertainties which could
cause actual results and experience to differ materially from the Company's expectations. Such risks
and uncertainties include, but are not limited to, risks relating to: (i) whether the Company will be
able to raise sufficient capital, or at all; (ii) whether the Company will be able to source drill rigs and other services to conduct the anticipated operations within the expected costs; and (iii) whether any wells drilled will be successful and whether any production will be in commercial quantities. If any such risks actually occur, they could materially adversely affect the Company's business, financial condition or results of operations. Inthat case the trading price of the Company's common shares could decline, perhaps materially. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made.
Canoel does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in Canoel's expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, please contact:
Jose Ramon Lopez Portillo Andrea Cattaneo
Chairman of the Board CEO & President
Telephone: (403) 938-8154
Telefax: (403) 775-4474
This press release is not to be distributed to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities law.
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