Arctic Hunter Signs Letter of Intent for the Asset Purchase to Acquire Interests in Temblor’s /Witter Field Oil and Gas Discovery Situated in the San Joaquin Valley, California ____________________________________________________________________________________
ARCTIC HUNTER ENERGY INC.
c/o Suite 1200 - 750 West Pender Street · Vancouver · British Columbia · V6C 2T8 Telephone: (604) 681-3131
NEWS RELEASE
June 22, 2018 TSX-V Trading Symbol: AHU
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ARCTIC HUNTER SIGNS LETTER OF INTENT FOR THE ASSET PURCHASE TO ACQUIRE INTERESTS IN TEMBLOR’S /WITTER FIELD OIL AND GAS DISCOVERY SITUATED IN THE SAN JOAQUIN VALLEY, CALIFORNIA
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VANCOUVER, B.C. - Arctic Hunter Energy Inc. (TSX-V: AHU) (“Arctic Hunter” or the “Company”) announces that it has negotiated and entered into a non-binding letter of intent for an asset purchase pursuant to which the Company will acquire 4,250 barrels of oil and 18,750 mcf of gas, from interests in oil and gas situated in the San Joaquin Valley, in central California (“Temblor Petroleum’s Witter Field Assets”) for the approximate purchase price of 2,249,100 shares of Arctic Hunter at a deemed price of $0.10 cents per share, subject to the completion of NI -5101 Reserve Report, final due diligence and the usual industry adjustments, (the “Arctic Hunter Transaction”) such transaction having an anticipated completion date of September 1, 2018. This transaction is subject to TSX Venture Exchange approval.
THE “TORRI” – Oil & Gas Term Overriding Royalty Interest
The TORRI is a non-operating overriding royalty interest that does not bear production expenses and is created out of and burdening leasehold working interest in the Witter Field Leases. The TORRI has a limited term which commences at the effective time and automatically terminates and ends on that date when the purchaser has received the purchaser’s proportionate share of oil and gas produced from the Leases attributable to a portion of Temblor’s working interest therein. The transaction has no, up-front capital requirements and the production cash flow is expected to be immediately accretive to earnings upon the effective date.
The Arctic Hunter proposed light Oil & Gas transaction represents the Company’s initial diversification into the United States and the California oil and gas resource sector by acquiring and securing monthly light oil production revenue and, allowing the Company to access advanced oil exploration and drilling and revenue opportunities. This strategic acquisition of additional revenue producing resource assets will also allow the Company to access a wide portfolio of oil exploration opportunities situated in this oil region. The Temblor/Witter Field Oil project will also help to compliment the Company’s existing heavy oil production in Alberta and Saskatchewan and provides the Company with reputable American working interest partners seasoned in light oil & gas production, which will allow the Company access to future expansion opportunities in the oil and natural gas resource sector in this region of California.
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ABOUT THE TEMBLOR/ WITTER FIELD OIL & GAS DISCOVERY & PROJECT SITUATED IN THE SAN JOAQUIN VALLEY OF CENTRAL CALIFORNIA
The Temblor/Witter Field project is situated in the San Joaquin Valley, in Central California and was drilled and discovered by Temblor Petroleum and its partners in 2015. Since its discovery Temblor and its partners have invested significant capital in developing a fully completed production facility and gas pipeline with liquid processing facilities. The Witter Field project is now in commissioning and will begin full commercial production shortly. In addition to the development of the new wells and the newly completed processing facilities, Temblor has already received a conditional use permit from Fresno County for the drilling and development of other wells and expanded facilities to accommodate the full development of the field. Development and expansion of the discovery field is expected for many years. The well was drilled and completed in 2015. The current operator, Temblor Petroleum LLC is expected to drill an additional 2 vertical wells this year and integrate production to the newly installed facilities operation which can handle over 1,000 BOPD of light sweet oil. Additional drilling and exploration growth activity has been planned for the project in 2018-2025, with its working interest partners.
The management of the Company continues to review a number of additional, multiple potential large scale, highly prospective oil & gas production and exploration opportunities situated in the San Joaquin Valley region of California. The targeted assets and opportunities currently under review include a number of oil production assets with infrastructure facilities, monthly oil & gas production revenue, combined with a team of seasoned oil field personnel and field production operators in place to oversee production. The production and exploration opportunities being reviewed are situated on trend with a number of large regional California hydrocarbon discoveries which are nearby to existing producing oil fields. The management of the Company continues to review and maintain its high standard of due diligence with regard to the selection of any new management additions, and is being highly selective while considering and assessing its review of the various oil & gas production opportunities while completing its due diligence on the California opportunities and exploration datasets being presented. The Company continues to be cost effective and maintains its low overhead while opportunities are being explored.
MI 61-101
A portion of the assets being acquired in this transaction are being purchased from an entity under the control and direction of an insider of the Company. As a result, the acquisition is considered to be a “related party transaction” pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transaction (“MI 61-101”). The Company determined that exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 were available for the transaction pursuant to Section 5.5(a) and Section 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the transaction involving the insider was not more than 25% of the Company’s market capitalization.
ABOUT ARCTIC HUNTER – OIL AND GAS PRODUCTION
The Company is a Canadian Oil & Gas exploration and development company that identifies, and finances the acquisition, exploration and development of oil and gas assets primarily situated in Western Canada. The Company is a junior heavy oil producer in the greater Lloydminster area of Alberta & Saskatchewan. The Company is constantly reviewing future production and exploration opportunities and selective property acquisitions and identifying low risk exploration drilling opportunities situated in Canada, the United States and abroad.
The Company has qualified management and has an Oil & Gas team of professionals seasoned in production, field exploration and drilling. The Company has the necessary manpower in place to develop its natural resource properties and manage its production properties. The Company is committed to minimizing risk through the selective acquisition, exploration and development of petroleum and natural gas resource assets.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Tim Coupland, President and CEO Arctic Hunter Energy Inc.
Tel: (604) 681-3131 [email protected]
Neither the TSX Venture Exchange nor its Regulation Services Provider, (as the term is defined in the Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.