PetroFrontier Corp. Announces Credit Facility

March 2, 2021 9:04 AM EST

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CALGARY, AB / ACCESSWIRE / March 2, 2021 / PetroFrontier Corp. ("PetroFrontier" or the "Corporation") (TSXV:PFC) is pleased to announce that it has secured a credit facility enabling it to meet its drilling commitments.

Credit Facility

The commitment letter provided to the Corporation provides for advances in the amount of up to CDN $2,000,000 (the "Credit Facility") from a syndicate of lenders including Kasten Energy Inc. ("Kasten") and Paul Cheung (collectively, the "Lenders"). Kasten and Paul Cheung are insiders of PetroFrontier as they each own more than 10% of the outstanding common shares of the Corporation (the "Common Shares"). The closing of the Credit Facility is subject to the approval of the TSX Venture Exchange Inc. (the "Exchange").

Advances drawn under the Credit Facility ("Advances") bear interest at a rate of 8% per annum. The Advances under the Credit Facility are due on the earlier of one year from the date of the final Advance under the Credit Facility or April 30, 2022. The Credit Facility will be secured by a General Security Agreement in favor of the Lenders.

Funds advanced under the Credit Facility will be used for the drilling of four (4) commitment wells required to be drilled under the Corporation's existing joint ventures.

In accordance with the policies of the Exchange, the Corporation has agreed to pay, pro rata to the Lenders, a fee equal to 20% of the value of the Credit Facility which will be paid by the issuance of Common Shares at a deemed price of $0.075 per Common Share - being the closing price of the Common Shares on the date of entering into of the Credit Facility. The issuance of the Common Shares in payment of the fee remains subject to approval of the Exchange.

Related Party Participation in the Credit Facility

Kasten and Paul Cheung are insiders of the Corporation and provided $1.5 million and $500,000 of the Credit Facility, respectively, and are therefore entitled to receive a fee equal to 4,000,000 Common Shares and 1,333,332 Common Shares, respectively. As insiders of PetroFrontier participated in the Credit Facility, it is deemed to be a "related party transaction" as defined under Multilateral Instrument 61-101-Protection of Minority Security Holders in Special Transactions ("MI 61-101").

Neither the Corporation, nor to the knowledge of the Corporation after reasonable inquiry, a related party has knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed. Prior to closing of the Credit Facility, Kasten and Paul Cheung own 95,000,000 and 57,184,395 Common Shares, respectively (representing 44.52% and 26.80% of the issued and outstanding Common Shares, respectively). Following closing of the Credit Facility, Kasten and Paul Cheung will own 99,000,000 and 58,517,727 Common Shares, respectively (representing 45.27% and 26.76% % of the issued and outstanding Common Shares, respectively).

The Credit Facility is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(c) and 5.7(1)(b)) as it was a distribution of securities for cash and neither the fair market value of the Credit Facility or fees distributed to, nor the consideration received from, interested parties exceeded $2,500,000.

The Corporation did not file a material change report more than 21 days before the expected closing of the Credit Facility because the details of the participation therein by related parties of the Corporation were not settled until shortly prior to the closing of the Credit Facility and the Corporation wished to close on an expedited basis in order to fund its drilling commitments.

About PetroFrontier Corp.

PetroFrontier is a junior energy company currently focused on developing two Mannville heavy oil plays in the Cold Lake and Wabasca areas of Alberta.

PetroFrontier's head office is in Calgary, Alberta and its Common Shares are listed for trading on the Exchange under the symbol "PFC".

Forward-Looking Statements

This press release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of PetroFrontier, including final approval of the Exchange and the use of proceeds of the Credit Facility. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Any forward-looking statements are made as of the date of this release and, other than as required by applicable securities laws, PetroFrontier does not assume any obligation to update or revise them to reflect new events or circumstances.

Neither the 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.

Not for release in the United States of America

For More Information Contact

Kelly Kimbley, President & CEO

PetroFrontier Corp.
Suite 900, 903 - 8 Avenue S.W.
Calgary, Alberta, Canada T2P 0P7

Telephone: (403) 718-0366

SOURCE: PetroFrontier Corp.

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