CORRE Announces Termination of SCM Shareholders' Agreement
TORONTO, ONTARIO--(Marketwired - Nov 21, 2014) - Canadian Oil Recovery and Remediation Enterprises Ltd. (TSX VENTURE:CVR) ("CORRE" or the "Company") wishes to announce the termination of the Shareholders' Agreement of SAR CORRE MENA LIMITED ("SCM") and the transfer of the interest of SAR AS ("SAR") of 45% in SCM to CORRE.
SAR has been unable to formally assign the Kuwait Oil Company ("KOC") OBM Drill Cuttings Treatment Contract ("KOC Contract") to SAR CORRE MENA LIMITED ("SCM") because, under its contractual terms with its pre-qualified contractors, KOC does not permit such an assignment. This has put SAR in the position of being the sole contractor fully accountable to KOC for the execution of the contract. This has also placed the burden of risk entirely on SAR rather than on SCM, the actual beneficiary of the KOC Contract under the terms of the SCM Shareholders' Agreement.
Furthermore, due to the non-assignment of the KOC Contract by SAR to SCM, it became very difficult and complicated for SCM to participate in the KOC Contract financing. Also, certain irresolvable issues dealing with negative tax implications affecting CORRE's proportionate revenue from the KOC Contract emerged. Despite the best efforts of SAR and CORRE to find workable solutions to resolve these issues, it became apparent over time to both parties that none were readily available.
Accordingly, it was decided by both SAR and CORRE to amicably terminate the SCM Shareholders' Agreement and for SAR to compensate CORRE for its input in securing the KOC Contract, as well as to find, in the future, an alternative operational business model for SAR and CORRE to continue their business co-operation in the MENA region.
Under the terms of the Settlement Agreement, SAR will pay CORRE on the date of the signing of said agreement, the initial fee of Canadian $125,000. SAR will further pay CORRE two (2%) percent of each gross payment that SAR receives from KOC under the KOC Contract. Moreover, the Settlement Agreement provides that CORRE and SAR exchange mutual releases from all liabilities and obligations, and that such releases include CORRE, SAR and SCM shareholders, officers and directors.
About CORRE
CORRE is a Canadian-based oil services company which trades on the TSX Venture Exchange under the symbol CVR. CORRE provides full cycle oil waste management solutions to the petroleum industry. CORRE's customers are primarily in the upstream petroleum sector (oil production and drilling companies) and downstream petroleum sector (oil refinery, transportation and distribution companies). CORRE's operating lines include remediating oil-contaminated soil; treating sludge, oil based muds and drilling waste, oil recovery; automated oil storage tank cleaning, oil and gas engineering, and project management. CORRE provides its advanced environmental solutions through strategic operating partnerships with some of the most distinguished companies throughout the world.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, the potential for obtaining successful contracts via the tendering processes discussed herein and negotiations regarding potential projects. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: commodity price volatility; general economic conditions in Canada, the United States, the MENA region and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
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