CALGARY, ALBERTA--(Marketwired - March 2, 2015) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Azabache Energy Inc. (TSX VENTURE:AZA) ("Azabache" or the "Company") today announces its operating and financial results for the six months ended December 31, 2014. Copies of the Company's unaudited condensed interim consolidated financial statements and related Management's Discussion and Analysis ("MD&A") are being filed with Canadian securities regulatory authorities and will be made available under the Company's profile at
www.sedar.com and on the Company's website at
www.azaenergy.com.
Highlights of the 6-month period ended December 31, 2014 included:
Strategic direction
The Company has reached an agreement with the Government of Neuquen and its partner, GyP, on the future development requirements for both the Covunco and El Corte blocks. The Company has agreed that over the next 3 years, they will complete 76,000 acres of 3D seismic, fracture stimulate two existing wells and drill and fracture stimulate 3 new vertical wells. The cost of this program has been estimated at approximately $60 M.
On December 30, 2014, the Company announced that it had retained the services of Fenix Partners, an investment banking firm, to assist with finding a long term partner to provide both funding and expertise in developing the Vaca Muerta properties.
Operating results
During the quarter ended December 31, 2014, the Company recorded a loss of $1,122,246 ($0.01 per share) compared to a loss of $1,554,476 ($0.01 per share) for the same period in the prior year. For the six months ended December 31, 2014, the loss amounted to $2,687,560 compared to $2,346,103 for the previous year.
None of the properties in which the Company holds an interest recorded production income as of December 31, 2014.
Financing
On December 15, 2014 the Company announced a loan program to borrow up to $3,500,000 to fund ongoing operations while working with Fenix Partners to identify a long-term financial and/or operating partner.
The Company closed $2,365,000 of the loans on January 15, 2015. Terms of the loan were 18 months to maturity with an interest coupon of 4%. The loans were sold at a 7% discount to face value. The Company awarded 4 common shares of the corporation for every $1 of face value of the bonds. The proceeds will be used for general corporate purposes.
Despite the successful completion of the private placement and the completion of the Loan Agreement with RBE, the Company recognizes the large amount of capital that will be required to develop its Vaca Muerta land holdings and the low probability of financing these expenditures on its own. The Company continues to evaluate the best ways to finance the development of its assets. The various alternatives may involve a farm out, a strategic investor or some other transaction that will advance the interest of shareholders.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This press release contains forward-looking statements concerning the Company's operations. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Azabache. Although Azabache 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 Azabache 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. The forward-looking statements contained in this document are made as of the date hereof and Azabache 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.