Toronto, Ontario--(Newsfile Corp. - March 17, 2021) - Silk Energy Limited (the "Company") is pleased to announce it has completed its acquisition of the ownership of UnionField Group ("UnionField") by the Company's wholly-owned Norwegian subsidiary, Silk Energy AS ("Silk AS") and substantially restructured the US $21 million convertible debenture that was issued to Right Way Ltd (the "Vendor") of UnionField.
Background
Silk Energy Limited is a Canadian resource company focused on the identification and exploration of oil and gas assets in Kazakhstan through its wholly-owned Norwegian subsidiary, Silk AS. Its particular focus is the Ustyurt Property, in the Mangystau region covering more than 6,400 km2 which is classified by the Ministry of Energy and the Kazakhstan Prime Minister's office as a "strategic license" due its potential and its proximity to numerous significant and established oilfields. The Ustyurt Property will be developed through a Kazakhstani limited liability partnership (the "LLP") comprised of two limited partners, each holding a 50% participating interest: KazMunayGas National Company JSC, Kazakhstan's state-owned leading vertically integrated oil and gas company, and UnionField, a British Virgin Islands company which is 100% owned by Silk AS. Drilling on the property is expected to commence during the course of 2021 with the objective of converting estimated prospective resources into established reserves. This initial drilling program will target the Salken prospect on the concession which has an area of approximately 75 square kilometres.
Silk AS had contracted to purchase all of the shares of UnionField from Right Way Ltd. (the "Vendor") through the issue of a US $21 million convertible debenture, bearing interest at a rate of 6% plus the assumption of responsibility for funding UnionField's contributions to the LLP.
This US$21 million convertible debenture has been restructured as follows:
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Outstanding interest of US$1,260,000 has been converted into 4,095,000 common shares of the Company at a price of C$0.40 per share
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US $15 million of the principal amount of the convertible debenture has been converted into 47,625,000 Class A Preferred Shares of the Company at a deemed price of C$0.40 per share. The Class A Preferred Shares are convertible into common shares at the holder's option.
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The term of the remaining US$6 million principal amount of convertible debenture has been extended to 31st January 2022.