VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan 29, 2013) - CaiTerra International Energy Corporation ("CaiTerra" or the "Company") (TSX VENTURE:CTI) is pleased to announce that it has signed a letter agreement to sell up to 50% of its interests in certain undeveloped mineral rights in the Faust area of Alberta (the "Faust Property") to an arm''s length Alberta private company (the "Purchaser").
The Faust Property was recently acquired by CaiTerra on December 14, 2012 for a total cash payment of CDN$2,500,000 and is located just north of the prolific Swan Hills oil field and west of Black Pearl Resources Inc.''s Mooney Pool producing oil property and south of the Town of Slave Lake. The lands forming the Faust Property are Crown leases with varying expiry dates. The Faust Property comprises approximately 18,600 net acres (approximately 30 sections) of lands of interest that are not subject to expiry for the next 3 years and a further 3,840 net acres (6 sections) of lands of interest that have been continued through to the end of April 2013.
Subject to receipt of all necessary approvals, including the approval of the TSX Venture Exchange, the purchase and sale of the Faust Property (the "Transaction") is expected to be completed as follows:
- upon the initial closing, which is intended to occur on or about February 1, 2013 (unless otherwise agreed to by the parties), the Purchaser will purchase 25% of CaiTerra''s interest in and to the Faust Property in consideration for the cash payment of CDN$1,000,000;
- the Purchaser shall have the option to purchase an additional 25% of CaiTerra''s interest in and to the Faust Property in consideration for an additional cash payment of CDN$1,000,000 (the "Option"); and
- the Option must be exercised by notice in writing to CaiTerra on or before February 13, 2013 and the closing of the purchase and sale of such additional 25% interest contemplated by the Option shall occur on or before February 15, 2013 (unless otherwise agreed to by the parties).
Each party has also covenanted and agreed to use commercially reasonable efforts to negotiate in good faith and enter into a definitive agreement (the "Definitive Agreement") and any other ancillary documents in respect of the Transaction on or before February 1, 2013, such Definitive Agreement and ancillary documents to be in form and substance satisfactory to the parties thereto, including representations and warranties to each party customary in transactions of this nature. The entering into of the Definitive Agreement and the completion of the Transaction will subject to a number of conditions including, without limitation, the following: (i) prior to entering into the Definitive Agreement, the Purchaser shall have completed its due diligence on the Faust Property to its satisfaction, acting reasonably, including, without limitation, being satisfied that CaiTerra has good and valid title to the Faust Property; and (ii) all director, shareholder, securities and regulatory approvals and acceptances (as required) and all third party consents (as required) having been obtained including, without limitation, the approval of the TSX Venture Exchange. Notwithstanding the above, the Purchaser has agreed that its own due diligence review will be limited to a review of the due diligence recently conducted by CaiTerra when CaiTerra acquired the Faust Property.
The Purchaser has provided CaiTerra with the sum of CDN$200,000 as a good faith, non-refundable deposit (the "Deposit") which shall be retained in trust by CaiTerra''s legal counsel pending closing. Upon the initial closing of the Transaction, the Deposit shall be released from trust and shall be deducted from the portion of the purchase price payable at the initial closing. If the Transaction is not completed for any reason whatsoever, the Deposit shall be forfeited to CaiTerra for CaiTerra''s own account absolutely as liquidated damages and not as a penalty.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the Transaction will be completed as proposed or at all. The TSX Venture Exchange Inc. has in no way passed on the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
A Note regarding Forward Looking Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains forward looking statements and information concerning the timing and entering into of the Definitive Agreement and any ancillary documents, the completion of the conditions precedent to entering into of the Definitive Agreement and the completion of the Transaction (including receipt of TSX Venture Exchange approval), the anticipated closing date of the Transaction, the exercise of the Option, and the Company''s anticipated interests in the Faust Property. The Company cautions that there are no assurances or guarantees that the transaction will be completed as proposed or at all.
Although the Company believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Company can give no assurance that they will prove to be correct.
Since forward-looking statements and information 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, the risks associated with the oil and gas industry in general such as 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 and resource estimates; the uncertainty of estimates and projections relating to reserves, resources, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to tax laws, royalties and environmental regulations, actual production from the acquired assets may be greater or less than estimates; failure to obtain the necessary regulatory approval, stock exchange and other regulatory approvals on the timelines planned. Management has included the above summary of assumptions and risks related to forward looking information provided in this press release in order to provide security holders with a more complete perspective on the Company''s future operations and such information may not be appropriate for other purposes.
The forward-looking statements and information 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.