REG - Cloudbreak Discovery - Royalty Interest on the Masten Unit Energy Project

Cloudbreak DiscoveryAnnouncement

31/05/2022 07:00

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RNS Number : 3127N  Cloudbreak Discovery PLC  31 May 2022

31 May 2022

 

Cloudbreak Discovery Plc

("Cloudbreak" or the "Company")

 

Cloudbreak Acquires a 3.25% Overriding Royalty Interest on the Masten Unit
Energy Project

 

Cloudbreak Discovery PLC (LSE: CDL) is pleased to announce that it has entered
into an agreement with G2 Energy Corp. (CSE: GTOO) ("G2") whereby Cloudbreak
will provide a portion of the acquisition financing for the Masten Unit Energy
Project (the "Project"), located in Cochran County Texas, to G2 in exchange
for a 3.25% Overriding Royalty Interest ("ORI") in the Project, in addition to
other considerations.

 

G2 has developed a comprehensive, economic programme of well recompletion and
drilling to rapidly grow both oil and natural gas production from the Project.
The programme consists of waterfloods and workovers of existing wells as well
as new offset wellbores and lateral drilling which G2 plans to initiate on
financial close.

 

Key Terms of the Transaction

·    Cloudbreak will provide G2 with a USD $2 million debenture on a
two-year term in exchange for a 3.25% ORI in the Project, in addition to other
considerations

·    G2 will pay 12% per annum interest to Cloudbreak, calculated and paid
quarterly in cash or shares at the discretion of Cloudbreak on the USD $2
million debenture

·    G2 will grant Cloudbreak;

o  6,500,000 Warrants with a $0.30 strike price with a two-year term from
financial close. The Warrants are subject to an acceleration clause;

o  Second position lien on the Project;

o  An area of interest providing Cloudbreak with a 1% ORI on any project
acquired within a two-mile radius of the Masten Unit lease boundary; and

o  An area of influence giving Cloudbreak the right of first refusal to
finance additional acquisitions within five miles of the Project boundary and
apply its existing 3.25% ORI to that project in addition to terms settled on
as part of an acquisition.

 

 

Kyler Hardy, President and CEO of Cloudbreak, commented, "This first royalty
acquisition highlights the beginning of a great working relationship between
Cloudbreak and G2. We are excited to be working with G2 and look forward to
additional regional acquisitions, showcasing how our project generator model
can be transitioned to the energy royalty sector.

 

"Through this and similar transactions in the future, we see an opportunity to
create significant shareholder value by growing Cloudbreak's cash-flow though
structured deals and portfolio royalty acquisitions in the natural resources
sector."

 

About the Masten Unit Energy Project

The Masten Unit Energy Project is a 3,194 net acre producing unit, 100% held
by production, located in the giant, billion-barrel Levelland Field in Cochran
County, Texas. The Levelland field is situated in the Permian Basin and the
producing formation is the San Andres, with an average depth in the area of
1,500 metres.

 

G2 has a 100% Working Interest and 81% Net Revenue Interest in the Project.
Current production is 80 barrels of oil per day and 130 thousand cubic feet of
gas per day from 18 active wells. All-in operating costs are USD $15.49 per
barrel of oil equivalent, including production tax. The field has Proven
reserves of 542 thousand barrels of oil equivalent ("MBOE") with a PV10 of USD
$6.2 million and Probable Reserves of 700 MBOE with a PV10 of USD $6.4 million
(Reserve commodity price assumptions: NYMEX and HH Strip March 2022).

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

 

Qualified Person

Mr. Rory Kutluoglu P. Geo., Chief Operation Officer of the Company, is the
Qualified Person ("QP") under NI 43-101 for the technical information in this
news release, has verified the data disclosed and approves the technical
contents contained in this news release.

 

-ENDS-

 

For additional information please contact:

 Cloudbreak Discovery PLC                                    Tel: +1 604 428 9480

                                                             Kyler Hardy, CEO                khardy@cloudbreakdiscovery.com (mailto:khardy@cloudbreakdiscovery.com)

 Novum Securities                                            Tel: +44 7399 9400

 (Financial Adviser)
                                                             David Coffman / Lucy Bowden

 Shard Capital Partners                                      Tel: +44 207 186 9900

 (Broker)

                                                             Damon Heath / Isabella Pierre

 BlytheRay                                                   Tel: +44 207 138 3204           Cloudbreak@blytheray.com (mailto:Cloudbreak@blytheray.com)

 (Financial PR/IR-London)
                                                             Tim Blythe

                                                             Megan Ray

 Stellium Services                                           Tel: +44(0)207 129 1205         Cloudbreak@StelliumServices.com (mailto:Cloudbreak@StelliumServices.com)

 (Investor Relations)
 www.StelliumServices.com (http://www.StelliumServices.com)  Andrew Wilson
                                                             Claire Bowden

 

 

About Cloudbreak Discovery PLC

Cloudbreak Discovery PLC, is a leading natural resource project generator,
working across a wide array of mineral assets that are being developed and
managed by an experienced team with a proven track record. Value accretion
within the projects being developed by Cloudbreak's generative model enables a
multi-asset approach to investing and exploration. Diversification within the
mining sector and amongst resource classes is key to withstanding the cycles
of natural resource investing.

 

About G2 Energy Corp.

G2 Energy Corp is a Canadian Securities Exchange listed company focused on
acquiring and developing overlooked, low risk, high return opportunities in
the oil and gas sector. G2 is seeking to acquire a portfolio of risk- managed
production and development opportunities onshore, U.S.A. In the near term, G2
is pursuing production acquisition opportunities with top tier operating
netbacks and infrastructure facilities to fast track future production growth.
 

 

 

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