Cerus Energy Corp. (“Cerus”) announces that further to previously released News Release dated March 31, 2017 it has entered into an agreement with Vital Energy Inc. (“Vital”).
Cerus has agreed and committed to fund Vital for up to ten million five hundred thousand dollars ($10,500,000.00) to acquire land and drill, frac, test, complete and equip up to seven (7) one mile horizontal test wells on Vital’s 100% owned Pennant Area Project Lands located in S.W. Saskatchewan.
Phase 1 Drilling Program
The seven (7) well drilling program will be “Phase 1” on a project that has identified an additional 27 drilling locations on the current Pennant Area Project Lands (3,360 acres). The primary target is medium gravity (21 degree) oil from the Upper Shaunovan formation. Vital will be the Operator of the Phase 1 drilling program. Drilling is expected to commence immediately after spring break up 2017.
Under the terms of the agreement, Cerus will pay up to $10,500,000.00 for 100% of the costs incurred by Vital to acquire lands posted for sale by Vital at the April 11, 2017, Saskatchewan public crown land sale and to drill, hydraulic fracture ("frac"), test, complete and equip up to seven (7) wells on Vital’s current Pennant Area project lands as a condition of earning.
Cerus will be entitled to receive 80% of the Net Profits generated by the sale of Petroleum Substances from the Phase 1 wells and their respective drilling spacing units. Once Cerus has recovered 180% of its investment back from the 80% net profits interests, Cerus will convert its net profits interest to a non-convertible 5% gross overriding royalty in the Phase 1 wells and their respective drilling spacing units.
Under the terms of the agreement Cerus will have the first right of refusal to fund additional Phases of development drilling on all of Vital’s Pennant Area project lands, on the same terms and conditions as for the Phase 1 wells.
Completion of Initial Commitment
Vital announces that Cerus has made the first cash advance in the amount of $360,000.00 CAD to Vital under the terms of the agreement. Vital was successful in acquiring 4 leases at the April 11, 2017, Saskatchewan crown land sale. The lease acquisitions totaled 5,220 acres more than doubling Vital’s current Pennant Area project lands and bringing the total 100% owned Pennant Area project lands to approximately 8,580 contiguous acres.
For further information regarding Camarico, see the Company's profile on SEDAR at www.sedar.com.
Mackenzie Loree, CEO
Neither the Canadian Securities Exchange (CSE) nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
Certain information in this news release is forward-looking within the meaning of certain securities laws, and is subject to important
risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the
Company’s beliefs, plans, expectations, anticipations, estimates and intentions. The words “may”, “could”, “should”, “would”,
“suspect”, “outlook”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “target” and similar words and expressions are used
to identify forward-looking information. The forward-looking information in this news release describes the Company’s expectations
as of the date of this news release. The results or events anticipated or predicted in such forward-looking information may differ
materially from actual results or events. Material factors which could cause actual results or events to differ materially from a
conclusion, forecast or projection in such forward-looking information include, among others, risks arising from general economic
conditions and adverse industry events.
When relying on forward-looking information to make decisions, investors and others should carefully consider the foregoing factors
and other uncertainties and potential events. The Company has assumed that the material factors referred to in the previous
paragraph will not cause such forward-looking information to differ materially from actual results or events. However, the list of these
factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual
outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF
THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT
RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT
UNDERTAKE TO UPDATE THIS INFORMATION ON AT ANY PARTICULAR TIME.