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HONG KONG, Jan. 13, 2021 (GLOBE NEWSWIRE) — Primeline Energy Holdings Inc. (“Primeline” or the “Company”), announces that it has been advised by the TSX Venture Exchange (the “TSX-V”) that its listing on the TSX-V will be transferred from Tier 2 of the TSX-V to the NEX Board on January 15, 2021 due to the length of time trading in the Company’s shares on the TSX-V has been suspended. Trading on the TSX-V was suspended because of the previously announced cease trade order issued against Primeline by the British Columbia Securities Commission on September 4, 2020 (the “CTO”). The CTO remains in force, and trading in Primeline’s shares on the NEX Board will remain suspended.
The CTO was issued because of Primeline’s inability to file its interim financial report for the three months ended June 30, 2020 and the related management’s discussion and analysis (the “Interim Filings”) by the applicable deadline. A copy of the CTO can be reviewed on the British Columbia Securities Commission’s website.
Primeline anticipates that it will be unable to complete and file: (i) the Interim Filings; (ii) its annual financial statements for the Company’s fiscal year ended March 31, 2020 and related management’s discussion and analysis, and its reserves data under National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities for the Company’s fiscal year ended March 31, 2020; and (iii) its interim financial report for the six months ended September 30, 2020, until the syndicate of banks which provided financing for Primeline’s share of the development costs for the LS 36-1 Gas Field (the “Syndicate”) confirm how they wish to proceed with respect to enforcement of their security interest over Primeline’s interest in the LS 36-1 Gas Field.
As previously announced on June 15, 2020, the award (“the Award”) in the arbitration by the Company against China National Offshore Oil Corporation and China National Offshore Oil Corporation (together “CNOOC”), upheld counterclaims made by CNOOC for amounts of approximately $US30 million plus interest. While Petroleum Contract 25-34 remains in force following the Award, Primeline is unable to pay the amounts due under the Award and is in default under its credit facility with the Syndicate. Primeline is unable to service the debt to the Syndicate as all cash flow from the gas field, which is significantly reduced in any event as a result of natural depletion of the field, is retained by CNOOC and set off of against amounts due under the Award. As a result, Primeline is unable to remedy the default under the credit facility and is therefore insolvent. However, although Primeline is in communication with and co-operating fully with the Syndicate with regard to the current position, the Syndicate has yet to determine how they wish to proceed with regard to enforcement of their security interests.
In the meantime, as previously announced on September 11, 2020, Primeline has applied in the High Court of the Republic of Singapore to set aside the Award on the basis of procedural breaches leading to a breach of the rules of natural justice. It has been necessary for Primeline to obtain an order for service of such proceedings out of the jurisdiction of Singapore and Primeline has been informed that the Singapore Courts have sent the necessary documents to China in order that the Courts in China can effect such service. No date for a hearing of the application has been fixed.
Primeline confirms that, other than as disclosed in prior press releases, there have been no material business developments since its press release of August 21, 2020 and the filing on February 13, 2020 of the Company’s latest interim financial report for the period ended December 31, 2019.
About Primeline Energy Holdings Inc.
Primeline is an exploration and production company focusing exclusively on China natural resources under petroleum contracts with CNOOC in the East China Sea. The LS36-1 Gas Field has been in production since July 2014. Shares of Primeline are listed for trading on the TSX Venture Exchange under the symbol PEH.
ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC.
Signed “Andrew Biggs”
Chief Executive Officer
|Primeline Energy Holding Inc.|
|Andrew Biggs, CEO
PH: +44 207.499.8888
Fax: +44 560 372 5179
Toll Free: 1.877.818.0688
Please visit the Company’s website at www.primelineenergy.com.
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.
Some of the statements in this news release contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Primeline. These statements relate to Primeline’s ability to continue operations, and to complete and file the financial statements and related information referred to above. Although these statements are based on assumptions management believes to be reasonable, actual results may vary from those anticipated in such statements. The Syndicate may realize on its security interest over Primeline’s interest in the LS 36-1 Gas Field, and if it does that will result in the seizure of all of Primeline’s material assets, in which event Primeline will be unable to continue operations. If the Syndicate confirms how it intends to proceed with respect to enforcement of its security interest, Primeline may nevertheless be unable to complete and file such financial statements and related information, and if it is not Primeline will remain subject to the CTO. Primeline assumes no obligation to update forward-looking information, except as required by law. Exploration for oil and gas is subject to the inherent risk that it will not result in a commercial discovery.