CALGARY - Softrock Minerals Ltd. ('Softrock' or the 'Corporation') (TSXV: SFT.V) is pleased to announce that it has entered into a definitive reorganization and investment agreement (the 'Recapitalization Agreement') with Robin Auld, Matthew Klukas, Brian Anderson, Hendra Jaya, and Henry Groen which provides for: (i) a non-brokered private placement of units of Softrock (the 'Units') at a price equal to $0.04 per Unit for minimum gross proceeds of $3.0 million, with best efforts being used to obtain subscriptions for maximum gross proceeds of $5.0 million (the 'Non-Brokered Private Placement'), and (ii) the appointment of a new management team and reconstitution of the board of directors (the 'New Softrock Board') of Softrock.
Concurrently with the completion of the Transaction, it is expected that the name of the Corporation will be changed to 'Criterium Energy Ltd.' (the 'Name Change'), subject to receiving the necessary shareholder approvals and approval of the TSX Venture Exchange (the 'TSXV').
The New Management Team will be led by Robin Auld as President and Chief Executive Officer, Matthew Klukas as Chief Operating Officer, Henry Groen as Chief Financial Officer, and Hendra Jaya as Director, Indonesia. Upon completion of the Transaction, Softrock has agreed that the board of directors will be reconstituted and shall initially consist of existing board member Michele Stanners, and new directors Robin Auld, and Brian Anderson. It is anticipated that additional independent directors will be appointed at the next annual general meeting of the Corporation. Each member of the New Management Team and the New Softrock Board along with the current directors of Softrock intend to participate in the Non-Brokered Private Placement.
New Management Team
The New Management Team has an extensive track record of value creation in the energy sector and intends to execute a growth-and-income business model focused on upstream and transitional energies in Southeast Asia ('ASEAN'1). Collectively, the New Management Team and the New Softrock Board has a strong reputation of collaborative and ethical business within ASEAN, a reputation built upon over 100 combined years of experience with junior to intermediates (Jadestone Energy and Addax Petroleum), IOCs (Talisman Energy and Repsol), NOCs (Pertamina), and Super Majors (Shell). In addition to their deep ASEAN experience, the New Management Team has also delivered value in the North American upstream, midstream and power generation sectors for many years, with a focus on methods and technologies that enhance reservoir performance and operational efficiencies.
Vision & Strategy
The New Management Team intends to build a large independent upstream energy company by executing an acquisition, development, and optimization strategy targeting ASEAN upstream energy assets. This vision is underpinned by the New Management Team's technical and commercial capabilities, the regions high-yield energy market, and a strong M&A pipeline in ASEAN that the New Management Team believes will result in scalable growth and sustainable cash generation.
Actively supporting the energy transition
By 2035, ASEAN's population is forecasted to be over 800 million and the middle-class population is expected to double, reaching approximately 350 million people, exceeding the entire United States population. This demographic emergence is the catalyst for world leading economic growth with GDP forecasted to increase by 140% and energy demand to keep pace with an increase of over 125%2. Various forms of energy will be required to support these growing economies and hydrocarbons will play a pivotal role as natural gas demand is expected to grow by at least 50% by 2050 under the accelerated transition scenario limiting global temperature rise to 2-degreeC3. This demand growth is driven by coal to gas switching for power generation and underpinning intermittent renewables.
Executing upon Strategic Pillars
Upon completion of the Transaction, the New Management Team intends to target upstream energy assets in ASEAN that can support a free cash flow operating model by realizing development growth, production optimization, and economies of scale. The New Management Team will prioritize a combination of producing assets and energy developments near demand centers and exposure to premium-priced markets when compared to North America.
Forward-looking information and statements
Certain information contained herein may constitute forward-looking statements and information (collectively, 'forward-looking statements') within the meaning of applicable securities legislation that involve known and unknown risks, assumptions, uncertainties and other factors. Forward-looking statements may be identified by words like 'anticipates', 'estimates', 'expects', 'indicates', 'intends', 'may', 'could', 'should', 'would', 'plans', 'proposed', 'potential', 'will', and similar expressions. Forward-looking statements in this news release include: the composition of the New Management Team and the New Softrock Board and the benefits to be derived therefrom; the expectation that the Private Placement will be completed in accordance with its terms; the expectation that the Name Change will be completed; the expectation that additional members will be appointed to the New Softrock Board at the next annual general meeting of the Corporation; the timing of obtaining the approval of the Softrock shareholders of the Consolidation; the Consolidation ratio; Softrock's corporate strategy including with respect to the optimization strategy targeting ASEAN upstream energy assets, the anticipated benefits to be derived therefrom and expectations of the regions high-yield energy market; future demographics in ASEAN; the New Management Team's priorities and focus for the energy assets in ASEAN; the Corporation's assets comprise a valuation foundation to support the New Management Team's vision and strategy; anticipated subscription amounts, pricing and terms under the Private Placement; the intention to issue Severance Shares to the Executives and the terms thereof; the anticipated vesting terms of the Warrants; the planned use of the net proceeds of the Private Placement; Softrock's intention to obtain required TSXV approvals; expected timing for the Softrock Meeting and other similar statements. Such statements reflect the current views of the Corporation with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause results to differ materially from those expressed in the forward-looking statements.
Factors that could cause actual results to vary from forward-looking statements or may affect the operations, performance, development and results of the Corporation's businesses include, among other things: risks and assumptions associated with operations; the approval of the Transaction by the TSXV; risks inherent in the Corporation's future operations; increases in maintenance, operating or financing costs; the availability and price of labour, equipment and materials; competitive factors, including competition from third parties in the areas in which the New Management Team intends to operate, pricing pressures and supply and demand in the oil and gas industry; fluctuations in currency and interest rates; inflation; risks of war, hostilities, civil insurrection, pandemics (including COVID-19) and epidemics, instability and political and economic conditions in or affecting countries in which the New Management Team intends to operate (including the ongoing Russian-Ukrainian conflict); severe weather conditions and risks related to climate change; terrorist threats; risks associated with technology; changes in laws and regulations, including environmental, regulatory and taxation laws, and the interpretation of such changes to the Corporation's future business; availability of adequate levels of insurance; difficulty in obtaining necessary regulatory approvals and the maintenance of such approvals; general economic and business conditions and markets and such other similar risks and uncertainties. The impact of any one assumption, risk, uncertainty or other factor on a forward-looking statement cannot be determined with certainty, as these are interdependent and the Corporation's future course of action depends on the assessment of all information available at the relevant time.
With respect to forward-looking statements contained in this news release, the Corporation has made assumptions regarding, among other things: ASEAN's future population, demographic and energy demands; that upstream energy assets in ASEAN can support a free cash flow operating model by realizing development growth, production optimization, and economies of scale; the COVID-19 pandemic and the duration and impact thereof; future exchange and interest rates; supply of and demand for commodities; inflation; the availability of capital on satisfactory terms; the availability and price of labour and materials; the impact of increasing competition; conditions in general economic and financial markets; access to capital; the receipt and timing of regulatory and other required approvals; the ability of the New Management Team to implement its business strategies; the continuance of existing and proposed tax regimes and effects of regulation by governmental agencies.
The forward-looking statements contained in this news release are made as of the date hereof and the parties do not undertake any obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Tel: 403 807-9965