DFP 1701001 Pennant Saskatchewan Funding & Operational Update

NEWS RELEASE   |   Wednesday, August 2nd, 2017

DFP 1701001 Pennant Saskatchewan Funding & Operational Update

August 2, 2017 - Calgary, Alberta

 

Cerus Energy Corp. (the Company) announces that further to the previously released news release dated March 31, 2017, it has entered into an agreement with Vital Energy Inc. (“Vital”). Cerus has reached an agreement with Lomac Canada Ltd., a wholly owned subsidiary of Cerus, for the syndicated financing of the Phase I developments of the Pennant, Saskatchewan Development Finance Platform (DFP). The syndication will be funded through a combination of secure debt, credit and cash from arm’s length and non-arm’s length funders.

The Lomac Canada Syndicate will be awarded 160% of the 180% penalty, in addition to the retention of collected revenue until penalty payout. Cerus will retain a 20% margin on the project and the 5% GORR (Gross Overriding Royalty) for its transaction facilitation and oversight. According to R. Mackenzie Loree, President and CEO Cerus Energy Corporation, “We are very close to achieving the goals that have been set out for Cerus and the initiation of our DFP. The creation of a platform that can fund development operations on an ongoing basis, without requiring dilution or issuance of debt in Cerus, is key to our continued success.”

The Vital Pennant project will clearly highlight the effectiveness of the platform by creating opportunity for the developing company, while also providing a handsome return for Cerus. It will also provide a safe and secure opportunity for syndicated member participation. The Company appreciates the patience of its shareholders, as the DFP platform and model has required significant time and effort to establish and implement through this inaugural project.  

The Vital Pennant project will be the standard by which the effectiveness and success of the platform’s performance will be gauged. The Vital Pennant project has a minimum of 80 locations identified with additional locations expected to be booked with the completion of Phase III seismic project analysis. Based on the booked locations, the project has $112,000,000 committed to development, excluding pipelines or centralized processing facilities. The total Penalty amount will be in excess of $201,600,000, with a retained margin of $40,320,000 earned by Cerus.

In summary, Cerus aims to “cut its teeth” on this first project with Vital and then replicate the success of the system. As aggressively as possible, the Company’s will use its own cash flow and money, raised through the syndication program, to quickly deploy and develop projects. Cerus is confident that funders and participants in this project, will not only become confident in the reliability and repeatability of the program, but also in the management team’s vision, platform and project oversite abilities.

 

Operational Update

Cerus would like to announce that three of four surface leases have been successfully acquired, with construction of the first surface lease expected to commence within the next two weeks. The Company will be waiting on preferred services to begin the drilling process along with the completion of Lomac Canada’s Syndicate membership.

About Cerus Energy Group

Cerus Energy Group is a Tier 2 Canadian-based oil and gas exploration company trading on the TSX Venture Exchange with property assets in both Alberta and Saskatchewan.

About Cerus Energy Group's Subsidiary Companies

Texalta Industries Ltd. and Lomac Canada Ltd. are wholly owned subsidiary company's serving various sectors of the oil and gas industry in the Province of Alberta. Maverick Northstar is a private joint venture company between Petrostar Petroleum Corp. of Alberta, Canada and Maverick Synfuels Inc of North Carolina, USA. Maverick Northstar is a chemical processing company focused on improving the value of methane through the production and utilization of methanol in Western Canada located in the province of Alberta. Petrostar holds 60% ownership of Maverick Northstar shares. For further information, please contact:

Primary Contact:
Bruce Scafe
1-877-737-8864
bscafe@cerusenergy.com

Alternate Contact:
Mackenzie Loree, CEO
1-403-861-6779
mloree@cerusenergy.com

Neither the TSX Venture Exchange 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.