CALGARY, ALBERTA–(Marketwired – Jan. 31, 2017) – Virginia Hills Oil Corp. (“Virginia Hills” or the “Company“) (TSX VENTURE:VHO) announces that its syndicated credit facility (the “Credit Facility“) has matured and remains unpaid as of January 31, 2017. The failure to repay the approximate $95.6 million principal amount owing under the Credit Facility on January 31, 2017 constitutes an event of default under the Credit Facility and entitles the lenders to, among other things, enforce their security and appoint a receiver to manage the affairs of the Company. An event of default under the Credit Facility is also an event of default under the credit facility of Dolomite Energy Inc., the Company’s wholly-owned subsidiary. Virginia Hills has previously disclosed certain financial and non-financial covenant breaches under the Credit Facility in its year end 2015 and interim 2016 financial statements. Although the lenders have not enacted any of the remedies in relation to the current event of default and past covenant breaches, they have reserved their available rights and remedies in respect thereof. The Company is currently in negotiations with the lenders of the Credit Facility for an extension to allow Virginia Hills to continue its strategic review process, however, there is no certainty as to whether an extension will be obtained from the lenders and if so, on what terms.
As previously announced on August 26, 2016, Virginia Hills initiated a process to review strategic alternatives with a view of maximizing the value of the Company’s significant Slave Point light oil resource base. The Company does not have any further update at this time as it continues to evaluate different alternatives in light of its current financial position. Any strategy, if taken, is subject to material uncertainty and could have a material impact on the Company’s financial position and results of operations. Virginia Hills does not intend to disclose developments with respect to this process unless and until the board of directors of the Company has approved a definitive transaction or other course of action or otherwise deems that disclosure of developments is appropriate or otherwise required by law. There are no guarantees that the process will result in a transaction or, if a transaction is entered into, as to its terms or timing.
About Virginia Hills
The Company is a Calgary based oil and gas company with operations in the Red Earth area of Alberta. Virginia Hills’ shares are listed on the TSX Venture Exchange under the symbol “VHO”.
Forward-Looking Statement Advisory
Certain information set forth in this press release, including information and statements which may contain words such as “could”, “plans”, “should”, “anticipates”, “expects”, “believes”, “will” and similar expressions and statements relating to matters that are not historical facts, contain forward‐looking statements, including but not limited to statements regarding: actions the lenders may take under the Credit Facility, whether an extension will be granted in respect of the Credit Facility and the results of the strategic alternatives process. These statements involve known or unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Undue reliance should not be placed on these forward looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur.
Management has included forward-looking information in this press release in order to provide security holders with a more complete perspective on the Company’s future operations and such information may not be appropriate for other purposes. These forward-looking statements are based on certain assumptions and are subject to a number of risks including the risk that the Company’s lenders demand repayment of all indebtedness owing under the Credit Facility or seek to realize on its security, no extension will be granted in respect of the Credit Facility and that the Company is unable to successfully complete its strategic alternatives process. Investors are cautioned that such information, although considered reasonable by the Company, may prove to be incorrect.
Virginia Hills’ actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
President and Chief Executive Officer
Virginia Hills Oil Corp.
Vice President, Finance and Chief Financial Officer