Petrofrontier Corp. Announces Closing of Amended Debenture Extending Agreement Including Partial Debt Repayment

CALGARY, AB / ACCESSWIRE / September 25, 2020 / PetroFrontier Corp. (“PetroFrontier” or the “Corporation”) (TSXV:PFC) is pleased to announce that it has received approval from the TSX Venture Exchange Inc. (the “Exchange“) and has closed the amended debenture extending agreement which included the immediate repayment of certain of the amounts outstanding under its secured debenture.

Amended Debenture Extending Agreement

Further to the Corporation’s July 13 and August 18, 2020 press releases providing details of the extension agreement (the “Original Extending Agreement“) that extended payment of amounts owing to the Corporation’s senior secured creditor under the debenture granted on July 21, 2016 (the “Debenture“), the Corporation is pleased to announce that it has closed the amended Debenture and credit facility extending agreement (the “Amended Extending Agreement“) which extends the repayment terms of both the Debenture as well as the credit facility entered into on June 3, 2019 (the “Credit Facility“). Closing also resulted in a partial repayment of the Corporation’s indebtedness under the Debenture in the amount of $1,000,000. The partial repayment was completed by the issuance of 25,000,000 common shares of the Corporation (the “Common Shares“) at a deemed price of $0.04 per common shares.

Additional provisions of the Amended Extending Agreement include:

  1. The maturity dates for both the Debenture and Credit Facility are extended to August 31, 2022 (the “Extended Maturity Date“);
  2. The Debenture interest rate is revised to 8% per annum;
  3. An annual extension fee of 2% of the amount outstanding under the Debenture and Credit Facility is payable;
  4. The remaining amounts payable under the Debenture and Credit Facility will be convertible into Common Shares at the holder’s option at a price of $0.05 per Common Share for the first year and $0.10 for the second year; and
  5. All amounts owing under the Debenture and Credit Facility, including the extension fees, will be repayable on the Extended Maturity Date.

Related Party Participation in the Amended Extending Agreement

As disclosed in the Corporation’s August 18, 2020 press release, the Amended Extending Agreement was entered into between the Corporation and Kasten Energy Inc. (“Kasten“). Kasten is a control person of PetroFrontier which deems the Amended Extending Agreement to be a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). Kasten currently owns, or exercises control over 46.75% of the outstanding Common Shares, including the 25,000,000 Common Shares detailed above. For further details, please see the press release dated August 18, 2020.

Early Warning Report

This information is issued pursuant to Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103- The Early Warning System and Related Take-Over Bid and Insider Reporting Issues.

Pursuant to the Amended Extending Agreement, on September 24, 2020, Kasten was issued 25,000,000 Common Shares at a deemed price of $0.04 per share.

Kasten is a corporation continued in the Province of Alberta whose head office address is 900, 903 8th Ave S.W. Calgary, AB T2P 0P7. Kasten’s principal business is that of investments in the oil and gas business in Alberta – either through direct participation in oil and gas exploration and development activities or indirectly via equity investments into corporations involved in similar activities.

Immediately prior to closing the Amended Extending Agreement, Kasten held a total of 70,000,000 Common Shares directly, representing 39.28% of the then issued and outstanding Common Shares of the Corporation. Following the issuance of the 25,000,000 Common Shares issued pursuant to the Amended Extending Agreement, Kasten now holds 95,000,000 Common Shares directly, representing 46.75% of the currently issued and outstanding Common Shares. If the maximum of $2,000,000 is drawn under the Credit Facility and Kasten elects to convert such amount into Common Shares and converts the Debenture in the amount of $2,000,000 into Common Shares during the first year, Kasten would own Common Shares representing 55.51% of the then issued and outstanding common shares of the Corporation.

If converted, Kasten will have acquired the Common Shares as consideration for cash advances made under the Credit Facility and the conversion of the Debenture, and Kasten may, in the future, increase or decrease its ownership of securities of the Corporation, directly or indirectly, from time to time depending upon, among other things, the business and prospects of the Issuer and future market conditions.

A report respecting this acquisition will be filed with the applicable securities commissions using the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) and will be available for viewing on the Issuer’s profile at www.sedar.com.

Private Placement

Further to the Corporation’s August 18, 2020 press release announcing its intention to complete a private placement of Common Shares at a price of $0.04 per Common Share for proceeds of up to $1,000,000 (the “Private Placement“), the Corporation advises that Broker Warrants, if issued pursuant to the Private Placement, will allow the holder to acquire a Common share at a price of $0.05 per Common Share rather than a price of $0.04 as disclosed in the August 18, 2020 press release.

About PetroFrontier Corp.

PetroFrontier is a junior energy company currently focused on developing two Mannville heavy oil plays in the Cold Lake and Wabasca areas of Alberta.

PetroFrontier’s head office is in Calgary, Alberta and its Common Shares are listed for trading on the Exchange under the symbol “PFC”.

Forward-Looking Statements

This press release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of PetroFrontier, including closing of the Private Placement. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Any forward-looking statements are made as of the date of this release and, other than as required by applicable securities laws, PetroFrontier does not assume any obligation to update or revise them to reflect new events or circumstances.

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.

Not for release in the United States of America

For More Information Contact

Kelly Kimbley, President & CEO

PetroFrontier Corp.
Suite 900, 903 – 8 Avenue S.W.
Calgary, Alberta, Canada T2P 0P7

Telephone: (403) 718-0366
Email: [email protected]
Website: www.petrofrontier.com

SOURCE: PetroFrontier Corp.

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