Greenfields Petroleum Corporation Provides Update on Partner Default
HOUSTON, TEXAS--(Marketwired - Dec. 19, 2014) -
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Greenfields Petroleum Corporation ("Greenfields" or the "Company") (TSX VENTURE:GNF)(TSX VENTURE:GNF.DB), an independent exploration and production company with assets in Azerbaijan, is pleased to provide an update on Baghlan Group Limited ("BGL"), being the other shareholder of Bahar Energy Limited ("BEL") and its partner in the Bahar Project.
Greenfields Petroleum Corporation has been advised by BNP Paribas Trust Corporation UK Limited ("BNP") that BNP, in its capacity as trustee under certain loan documents with Baghlan Group FZCO ("Baghlan"), has accelerated the outstanding notes with Baghlan and has taken possession of mortgaged property related thereto. Included in this mortgaged property are Baghlan's shares of BGL. BGL is the owner of 2/3 of the shares of BEL (the "BGL Shares"), while Greenfields Petroleum International Company Ltd. ("GPIC"), a subsidiary of the Company, is the owner of the other 1/3 of the shares of BEL.
As a result, BNP has appointed joint receivers to dispose of the BGL Shares in order to maximize recovery value for the secured creditors in accordance with the joint receivers' statutory duties and their powers. The Company has been advised that the sale of the BGL Shares by the joint receivers is expected to occur within the next six months. Given the default by BGL in its financial obligations to BEL and the Bahar Project, Greenfields views this foreclosure as a favorable event and does not anticipate any negative near term impact on its operations.
In order to fund BGL's financial defaults as is required by GPIC under the BEL shareholders agreement, the Company has delivered a notice to the lender under the US$21 million loan facility announced on July 2, 2014, to draw down an additional US$4.3 million under the loan facility. Following the drawdown, the Company will have drawn down approximately US$20.8 million under the loan facility.
John Harkins, President and CEO of Greenfields, stated that: "The action by BNP is positive news and will hopefully lead to the replacement of BGL with a partner in BEL that is capable of the investment required by the Bahar Project. Once a new partner begins to contribute to the Bahar Project, GPIC is repaid for funding the defaults, and assuming that SOCAR Oil Affiliate funds its obligations as is required under the Joint Operating Agreement, we anticipate that the operator of the Bahar Project, Bahar Energy Operating Company, will be able to re-establish drilling operations in late 2015 with the benefit of the recently acquired 3D seismic over the Gum Deniz Oil Field."
About Greenfields Petroleum Corporation
Greenfields is a junior oil and natural gas corporation focused on the development and production of proven oil and gas reserves principally in the Republic of Azerbaijan. The Company plans to expand its oil and gas assets through further farm-ins and acquisitions of Production Sharing Agreements from foreign governments containing previously discovered but under-developed international oil and gas fields, also known as "greenfields". More information about the Company may be obtained on the Greenfields website at www.greenfields-petroleum.com.
This press release contains forward-looking statements. More particularly, this press release may include, but is not limited to, statements concerning: the sale of the BGL shares, the loan facility and future drilling activity. In addition, the use of any of the words "initial, "scheduled", "can", "will", "prior to", "estimate", "anticipate", "believe", "should", "forecast", "future", "continue", "may", "expect", and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained herein are based on certain key expectations and assumptions made by the Company, including, but not limited to, expectations and assumptions concerning the success of optimization and efficiency improvement projects, the availability of capital, current legislation, receipt of required regulatory approval, the success of future drilling and development activities, the performance of existing wells, the performance of new wells, general economic conditions, availability of required equipment and services, weather conditions and prevailing commodity prices. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity price and exchange rate fluctuations, changes in legislation affecting the oil and gas industry and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect the Company's operations and financial results are included under the headings "Risk Factors" in Greenfield's Annual Information Form, its Management Information Circular and similar headings in the Company's Management's Discussion & Analysis which may be viewed on www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither the 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.