Sagres Energy Inc. (TSX VENTURE:SGI) announces an update on corporate activities. Moving forward, in the short term, Sagres is focused on its two core assets, the onshore El Triunfo Block in Colombia and the three offshore Blocks in Jamaica.
The El Triunfo Block is comprised of 25,205 gross acres in the oil-rich Llanos Basin. The Block contains an undeveloped discovery well, La Cabana-1, that was drilled in 1984, on the flank of the 3D seismically defined San Sebastian prospect, and tested 736 bopd with water from the Mirador Formation and 338 bopd with no water from the Gacheta Formation, however was not put on production due to mechanical reasons. The Company presently is progressing in its civil works operations on the San Sebastian-1 well location which offsets the La Cabana-1 well approximately 400 meters to the northeast, in preparation of its anticipated mid-year start. The Company is looking into farming down its interest in the El Triunfo Block as it has been approached by other companies who have expressed an interest in a possible participation in the project.
Rainville Energy Corporation ("Rainville"), a wholly owned subsidiary of Sagres, is a party to three production sharing agreements with the Petroleum Corporation of Jamaica (the "PCJ") covering the right to explore and develop Blocks 9, 13 and 14 covering approximately 8,864 km² located offshore Jamaica (the "Blocks"). In February 2012 PCJ granted Rainville an extension to the first phase until April 30, 2012 to allow potential joint venture partners sufficient time to complete their evaluation of the Blocks. The Company is currently in discussion with multiple parties on the Jamaica venture and the Company should be able to provide further clarity over the next six weeks.
Appointment of Interim CEO
Sagres also announced that Gary Wine has resigned from the board and his position as the President and CEO of the Company. The Board of Directors has accepted his resignation and the Company thanks Mr. Wine for his service to Sagres and wishes him well in his future endeavors. In the interim, Sagres has appointed Jaime Lalinde as interim President of the Company. Mr. Lalinde is the Forbes and Manhattan Country representative in Colombia Sagres has commenced a search for a new President and CEO and expects to provide an update in due course.
Closing of Private Placement Financing
Sagres also announces that it has closed its private placement financing (the "Private Placement") first announced on March 9, 2012.
Pursuant to the closing of the Private Placement the Company has issued and sold a total of 57,921,666 units (the "Units") at a price of $0.06 per Unit for gross proceeds of $3,475,300. Each Unit is comprised of one common share of the Company and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to acquire one common share of the Company at an exercise price of $0.12 per common share for a period of 18 months following the closing date of the Offering. If at any time after four months and one day from the closing of the Offering, the common shares of the Company trade at $0.20 per common share or higher (on a volume weighted adjusted basis) for a period of 20 consecutive days, the Company will have the right to accelerate the expiry date of the Warrants to the date that is 30 days after the Company issues a news release announcing that it has elected to exercise this acceleration right.
The gross proceeds from the Private Placement will be used to fund exploration activities of the Company and for general corporate purposes. The Company paid finder's fees of between 5% and 6% in connection with the first tranche.
All securities issued pursuant to the Private Placement are subject to a four month hold period following the closing date. Closing of the Private Placement is subject to receipt of regulatory approval, including final TSX Venture approval.
This press release is not an offering of securities for sale in the United States. The common shares have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of that Act.
The Company also announces that it has entered into a settlement agreement with Canacol Energy (Guyana) Inc. ("Canacol") for outstanding amounts owed by Sagres to Canacol pursuant to cash calls related to a farmout agreement entered into between the parties and dated October 30, 2009. As part of the settlement Sagres will make payments to Canacol, with the final payment to be made on or before December 31, 2012. Sagres also agreed to grant Canacol a general security interest over the assets of the Company and its subsidiary, Sagres Energy (Guyana) Inc., in respect of a one million dollar payment due at the end of the year.
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