VANCOUVER, Sept. 23, 2019 /CNW/ - Fortem Resources Inc.
(TSXV: FTM; OTCQB: FTMR) (the "Company" or
"Fortem") is pleased to announce the signing of a
non-binding term sheet (the "Term Sheet") with an arm's
length party (the "Farmee"), pursuant to which the Company
has agreed to farm-out a portion of its working interest in the
Mancos formation located in Grand County,
Utah (the "Property"), held through its wholly-owned
subsidiary Rolling Rock Resources, LLC ("Rolling Rock") and
to establish a joint venture therewith (the "Joint
Venture"), subject to the entry of a definitive transaction
agreement (the "Definitive Agreement").
The Term Sheet
Pursuant to the terms of the Term Sheet, the Farmee will commit
up to US$15,000,000
(the "Commitment Amount") in up to ten tranches (each,
a "Tranche") in exchange for a 100% operating interest in
certain wells located on the Property (the "Operating
Interest"). Upon full payout of the Commitment Amount, the
Company will be entitled to a 20% interest in the income generated
from the Farmee's activities, which interest shall be increased to
25% following a 2.0x return of capital of the Farmee's investment
(the "Carry Structure"). The Operating Interest in the
agreed upon wells will be conveyed to the Farmee upon the execution
of the Definitive Agreement for the Obligation Tranche and upon
affirmative election by the Farmee to proceed with any Subsequent
Tranche (as defined below).
Within 90 days following the execution of the Definitive
Agreement, the Farmee will commence re-entering and test the behind
pipe potential of initial three wells identified in the Term Sheet
(the "Obligation Tranche"). Following the initial
production date of the last well brought to production in the
Obligation Tranche, the Farmee will, within 90 days, at its sole
option, have the option to form an additional Tranche of three
wells (each, a "Subsequent Tranche") in which it will
test the behind pipe potential of each Subsequent Tranche well
identified. The Farmee will have 45 days to complete operations on
the wells contained in each Subsequent Tranche. Following the
initial production date of the last well brought to production in
each Subsequent Tranche, the Farmee will, within 90 days, at its
sole option, have the option to form an additional Subsequent
Tranche (up to a maximum of 10 Subsequent Tranches). Failure to
exercise a Subsequent Tranche in a timely manner precludes the
Farmee from forming and participating in further Subsequent
Tranches.
Upon the execution of the Definitive Agreement for the
Obligation Tranche and upon affirmative election by the Farmee to
proceed with any Subsequent Tranche, the Joint Venture will be
formed and governed in accordance with the terms of a joint venture
agreement, the form of which will be settled and attached to the
Definitive Agreement.
A subsidiary of the Farmee, in collaboration with the Company
and Rolling Rock, is anticipated to be the operator upon formation
of the Joint Venture in regards to the participating wells. All
costs related to the wellbores subsequent to re-entry, including
plugging and abandonment costs, will be borne in proportion to the
Carry Structure at the time of commencement of wellbore operations.
No additional midstream fees are to be charged by the Company,
Rolling Rock, any related party or affiliate thereof to the Farmee
that are in excess of, or including a margin on top of the
necessary operating expenses incurred to gather, compress, process,
dehydrate, treat, and/or transport gas to sale. The Joint Venture
and all gas produced as a direct result of the Farmee, the Company
and Rolling Rock's activities will have primary service that takes
precedent over any third party gas produce from the subject
wells.
About Fortem Resources
Fortem Resources Inc. is a Nevada oil and gas corporation, which holds
properties in Alberta and
Utah. The Company is engaged in
the exploration, development and production of crude oil and
natural gas in the Western Canadian Sedimentary Basin and
Utah in the United States. The Company is seeking
North American and International expansion through an acquisition
strategy.
On behalf of the Board of Directors,
FORTEM RESOURCES INC.
"Michael
Caetano"
Michael Caetano
Chief Operating Officer
Tel: (403) 241-8912
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward Looking Statements
This news release includes certain "forward-looking
statements" under applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to,
statements with respect to the signing, closing and post-closing
matters related to the Definitive Agreement. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known
and unknown risks, uncertainties, and other factors which may cause
the actual results and future events to differ materially from
those expressed or implied by such forward-looking statements. Such
factors include, but are not limited to: (i) the current cease
trade order issued by the Alberta Securities Commission against the
Company on July 16, 2019; (ii) the
Company's inability to sign the Definitive Agreement; and (iii)
general market conditions. Although the Company believes that the
expectations and assumptions on which such forward looking
information is based are reasonable, undue reliance should not be
placed on the forward looking information because the Company can
give no assurance that they will prove to be correct. Forward
looking statements contained in this press release are made as of
the date of this press release. The Company disclaims any intent or
obligation to update publically any forward looking information,
whether as a result of new information, future events or results or
otherwise, other than as required by applicable securities laws.
Readers should consult all of the information set forth herein and
should also refer to the risk factors disclosure outlined in the
reports and other documents the Company files with the SEC,
available at www.sec.gov, and on the SEDAR, available at
www.sedar.com.
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SOURCE Fortem Resources Inc.