PetroNova announces $8 million private placement

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, July 9, 2014 /CNW/ - PetroNova Inc. ("PetroNova" or the "Company") (TSX-V: PNA), a company engaged in the exploration and development of oil and natural gas resources in Colombia, is pleased to announce an offering of 28,571,429 million common shares of PetroNova ("Common Shares") at a purchase price of $0.28 per Common Share by way of private placement (the "Private Placement") for aggregate proceeds of $8 million.

The Company intends to retain the services of A.V. Securities Inc., a corporation formed under the laws of the Republic of Panama, to act as a finder for the Private Placement (the "Finder"). The Finder will receive a cash fee of 4.75% of the proceeds raised, which is currently anticipated to be approximately $6 million.

The Company plans to use the net proceeds from the Private Placement to fund its delineation and exploratory drilling program in the CPO-13 Block and for general corporate purposes.

No agreement has yet been signed between the parties and there are no assurances that any agreement will be signed. Closing of the Private Placement is subject to the entire $8 million being raised and has certain conditions, including, among other things, the requirement for an aggregate of $2 million of the Private Placement being subscribed by Inepetrol Investments Ltd., a company related to the original founders of the Company, receipt of approval by the TSX Venture Exchange, approval of the board of directors of the Company (the "Board of Directors"), and execution of final documentation in form and substance satisfactory to the Finder and the Company and any significant investor. It is also currently intended that upon completion of the Private Placement, the Finder shall be able to recommend an individual to be appointed to the Board of Directors.

The Common Shares issued pursuant to the Private Placement shall be subject to a four (4) month statutory hold period from the closing of the Private Placement.

Strategic Alternatives Review Process

PetroNova has been working with Black Spruce Merchant Capital Corp., a Calgary based financial advisory firm, in a process to identify and consider corporate strategies and to provide, among other things, an assessment of strategic alternatives available to the Company and to develop strategies which allow the Company to maximize value for all of its shareholders.

The initiation of this strategic alternative review process was not in response to a proposed transaction. Rather, the Board of Directors undertook a thorough review of the Company's current share price, assets and operations and concluded that the Common Shares trade at a substantial discount to the inherent value of the businesses and underlying assets of PetroNova. Accordingly, the Board of Directors initiated a process to identify, examine and consider a range of strategic alternatives available to the Company. The ultimate objective of carrying out this review process is to determine which alternative might result in superior value for shareholders of the Company.

The Company has not set a definitive schedule to complete its strategic review. PetroNova does not intend to disclose developments with respect to the strategic review process unless and until its Board of Directors has approved a course of action or otherwise deems disclosure of developments is appropriate. There can be no assurance that any transaction will occur, or if a transaction is undertaken, as to its terms or timing.

About PetroNova:

The Company, through its subsidiaries, is engaged in the exploration for, and the acquisition and development of, oil and natural gas resources in South America, specifically in Colombia. The Company's assets currently include the Company's interests in the PUT-2 and Tinigua Blocks located in the Caguan-Putumayo Basin in Colombia, both of which are operated by the Company, and the non-operated Llanos Blocks located in the Llanos Basin in Colombia. The common shares of the Company trade on the TSX Venture Exchange under the stock symbol "PNA".

Caution Regarding Forward-Looking Statements and Information:

Certain statements contained in this press release constitute forward-looking statements. These statements relate to future events or the Company's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "intend", "plan", "continue", "estimate", "budget", "targeting", "project", "expect", "may", "will", "might", "should", "could", "believe", "predict" and "potential" and similar expressions are intended to identify forward-looking statements. Such statements represent the Company's internal projections, estimates, expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Management believes the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release.

In particular, this press release contains forward-looking statements relating to the use of proceeds of the Private Placement, future exploration and development activities and the timing thereof, including the Company's drilling plans and the regarding the review of various strategic alternatives, the failure of the Company to assess and successfully complete a strategic alternative and effect a transaction. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things: general economic, market and business conditions in Colombia and globally; future crude oil and natural gas prices; the continued availability of capital, undeveloped lands and skilled personnel; the ability to obtain equipment in a timely manner to carry out exploration and development activities; the regulatory framework governing royalties, taxes and environmental matters in Colombia and any other jurisdictions in which the Company may conduct its business in the future; the ability of the Company to obtain the necessary approvals, permits and licences to conduct its operations; future capital and exploration expenditures to be made by the Company; future sources of funding for the Company's exploration program; the geography of the areas in which the Company is exploring; and adequate weather and environmental conditions. In relation to use of proceeds of the Private Placement the material factors and assumptions include that the gross proceeds will be raised, that the Company will obtain all necessary approvals and that the board of directors will not determine that it is in the best interests of the Company to change the intended use of proceeds.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of certain risk factors, including, but not limited to: general economic, market and business conditions; risks related to the exploration, development and production of oil and natural gas; risks inherent in the Company's international operations, including security and legal risks in Colombia; risks related to the timing of completion of the Company's projects; competition for, among other things, capital, the acquisition of resources and skilled personnel; actions by governmental authorities, including changes in government regulation and taxation; the failure of the Company to obtain the necessary approvals, permits and licences to conduct its operations; environmental risks and hazards; the availability of capital on acceptable terms; the failure of the Company or the holder of certain licenses or leases to meet specific requirements of such licenses or leases; adverse claims made in respect of the Company's properties or assets; failure to engage or retain key personnel; geological, technical, drilling and processing problems, including the availability of equipment and access to properties; failure by counterparties to make payments or perform their operational or other obligations to the Company in compliance with the terms of contractual arrangements between the Company and such counterparties; and the other factors discussed under the heading "Risk Factors" in the Company's annual information form for the year ended December 31, 2013 and the Company's other continuous disclosure documents filed from time to time with applicable securities regulatory authorities in Canada and which may be accessed on the PetroNova's SEDAR profile at www.sedar.com

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements included in this press release are expressly qualified by this cautionary statement and are made as of the date of this press release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or results or otherwise, except as required by applicable securities laws.

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.

SOURCE: PetroNova Inc.

Antonio Vincentelli
President & Chief Executive Officer  
954 317 3990
[email protected]  

Stelvio Di Cecco
Chief Financial Officer
954 317 3990
[email protected]

Abby Garfunkel
Investor Relations
403-218-2887
[email protected]