Offering Details

Drakkar Energy Ltd.
Blacksteel Energy Inc.
Strategic Alternatives Process
Bid Deadline: 5/21/2020 12:00 PM

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OVERVIEW

Drakkar Energy Ltd. (“Drakkar”) and Blacksteel Energy Inc. (“Blacksteel”) (TSX-V: BEY) (collectively the “Companies”) have a combined 100% working interest (70% Drakkar, 30% Blacksteel) in an oil and natural gas asset in the Girouxville area of northwestern Alberta (the “Property”).  The Property is operated by Drakkar and is the sole asset of both Companies.

The Companies have engaged Sayer Energy Advisors to assist with a joint sales process whereby Drakkar and Blacksteel intend to both pursue a process to explore strategic alternatives.  The Companies are open to reviewing all alternatives, with potential outcomes to this process including, but not limited to, a sale or merger of the Companies or other form of business combination; a recapitalization or other form of strategic investment; or the sale of the working interests in the Property.

Recent production net to the Companies from the Property has averaged approximately 41 barrels of oil per day.

As of April 4, 2020, Drakkar’s net deemed asset value associated with the Property was $2.2 million (deemed assets of $3,116,932 and deemed liabilities of $948,731), with an LMR ratio of 3.29.

Drakkar is a privately-held company with no staff or severance obligations, with all services being provided by contractors and no office lease obligation.

Drakkar has estimated total tax pools of over $13.5 million as of June 30, 2019, including approximately $7.8 million in non-capital losses.  Additional corporate information relating to Drakkar will be provided to parties once a confidentiality agreement has been signed.

Blacksteel is a publicly-traded company with no staff or severance obligations, with all services being provided by contractors, no office lease obligation and it currently has a working capital deficiency of  approximately $1.8 million (which includes approximately $2.0 million of convertible debentures of which Blacksteel is currently pursuing a conversion to common shares or an extension of the term).

Blacksteel had estimated total tax pools of over $9.8 million as of April 30, 2019, including approximately $4.3 million in non-capital losses.

Overview Map Showing Location of the Divestiture Property

Blacksteel Corporate Overview