QIS Update #12 - 2016 - Newlox Gold Ventures financing update and Quattro Exploration files 2015 financial statements - June 7th 2016
Included in this update:
- Newlox Gold Ventures closes first tranche of private placement
- Quattro Exploration & Production reports 2015 financial results
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Newlox Gold Ventures Corp. (LUX:CSE)
Current Price: $0.025 (coverage commenced March 31/14 - $0.05)
Newlox Gold Ventures Corp. has announced that it has raised $181,718.95 through the closing of the first tranche (First Tranche) of the private placement announced on 12 April 2016. The First Tranche closing consists of the issuance of 3,634,379 common shares and 3,634,379 share purchase warrants.
Newlox announced its intention to raise up to $300,000 through a private placement as well as its intention to consolidate its share capital on approximately a 4:1 basis at its next shareholder meeting. Lock-up agreements have been signed with company shareholders and majority shareholder support has been obtained.
The proposed private placement (Private Placement) will raise up to $300,000 through the issuance of up to 6,000,000 pre-consolidated (1,537,486 post-consolidated) Newlox Shares ($0.20 per post-consolidated share) and 6,000,000 share purchase warrants (Warrants) at a price of $0.05 per unit (Unit) prior to closing of the Acquisition.
Each Warrant is non-transferrable and entitles the holder to purchase an additional pre-consolidated Newlox common share for $0.05 in the first 12 months, $0.10 between month 13 and 24 and $0.15 between months 25 and 36 ($0.20, $0.40, and $0.60 respectively post-consolidation). All unexercised warrants shall expire after a term of 3 years.
In connection with the closing of the First Tranche, the company will pay finders’ fees totaling $4,725.00 as well as issue 94,500 compensation units on the same terms as the Private Placement.
Four insiders of the company also participated in the First Tranche including two members of the executive team. In particular, more than $50,000 of the funds advanced by an insider of the company has already been deployed in operations. Together, company insiders subscribed for 2,284,379 Units of the First Tranche.
The proceeds of this Private Placement will be allocated to general administrative working capital and operations in Latin America as well as costs associated with the proposed acquisition of the assets of Cordillera Gold (announced 12 April 2016). A portion of the proceeds will be loaned to Cordillera and forgiven upon closing of the transaction.
The company intends to close the second tranche of this Private Placement by June 14th, 2016.
Quattro Exploration and Production Ltd. (QXP:TSX-V)
Current Price: $0.115 (coverage commenced Sep. 3/15 - $0.18)
Quattro Exploration and Production Ltd. has released its financial results for year-ended December 31, 2015, reporting an $0.08 per share loss due to a number of non-reoccurring charges totaling $4,488,200 while increasing reserves on a 2P basis by 166% at a cost of $4.80 per boe.
Despite the almost 48% decrease in world oil (WTI) and 40% decrease in natural gas prices (NYMEX) in 2015 from 2014, the company realized gross revenues of $15,038,644 in 2015, representing a modest reduction of only 16.5% compared to gross revenues of $18,003,800 in 2014. 2015 was a challenging year for the industry and Quattro was not immune, realizing $4,488,203 in expenses for non-recoverable partner expenses (due to partner receiverships and bankruptcies), and administrative restructuring charges, which are in management’s opinion non-recurring in nature and therefore will not impact future profitability of the company. These challenges were compounded by over 61 days of maintenance and plant turn-rounds by mid-stream operators, materially restricting the company’s revenues in 2015.
Despite these challenges in 2015 the company’s strong balance sheet at the end of 2014, positioned the company to make the best of a challenging year.
|Financial Results (in 000s)|
|Year Ended Dec. 31|
|Oil & NGLs (boe/d)||300||297|
|Natural Gas (boe/d)||1,102||1,110|
|Total boepd (6:1)||1,437||1,453|
(as at December 31, 2015)
At December 31, 2015, the company’s restricted exit production was 1,580 boe/day, representing a 4% increase from December 31, 2014. The company’s average production was 1,546 boe/day for the 304(net) days that were available which resulted in an annualized average production rate of 1,288 boe/d.
The company continues to focus on the strengthening of its financial foundation, as summarized above, and reported in its audited financial statements and corresponding management discussion and analysis.
Leonard Van Betuw, President and CEO commented, “Through measured capital spending decisions, and a continued focus on cost reductions in combination with strategic acquisitions, the company is pleased to report year-over-year growth of 150% in Quattro’s oil gas reserves of 6.602 mmboe on a Total Proven (1P) Reserves basis valued on December 31, 2015 at $58.5 million (NPVdiscounted10%) and 10.977 mmboe on a Proven plus Probable (2P) basis valued at $112.9 million (NPVdiscounted10%). This growth, despite an extremely challenging macro-environment for the company, proving to the market, Quattro’s continuing focus on maintaining the capacity to make patient, measured and sound business decisions that ultimately are for the betterment of all stakeholders.”
Quattro remained focused in 2015 on the long term development of its business and completed three strategic acquisitions funded through the issuance of three series of non-voting Class C preferred shares totaling a value of $6,063,500. The Acquisitions targeted additions to Quattro’s existing core areas in British Columbia and Saskatchewan.
Following the filing of the year-end financial statements and correlated MD&A, Quattro will be filing with the Alberta Securities Commission for the revocation of the management cease trade order currently in place.
QIS Capital: 2015 was a challenging year for oil and gas companies and Quattro certainly wasn’t immune. While the first 9 months of the year looked surprisingly positive, there were several unexpected items in Q4 including $4.5 million in non-recurring charges and writedowns. Much of this was due to receivership filings by several of the company’s joint venture partners. Due to these writedowns, Quattro is temporarily in violation of its debt covenants which it is working to repair. Commodity pricing has been strengthening over the last few months which should have a positive impact on Q2 results and going forward. We expect Q1 to be out later this week or early next week and we will send out a summary of those results when they are released.
Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The company profiled assumes no liability for the information presented. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 3,366,000 shares, 2,000,000 warrants, and a $54,471 convertible debenture of Newlox Gold Ventures Corp., and 272,000 shares of Quattro Exploration and Production Ltd. QIS Capital may have a financial relationship with these companies and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2016 QIS Capital Corporation.