Crown Point And Centaurus Enter Into Term Sheet

(Crown Point, 7.Jan.2021) — Crown Point Energy Inc., a Calgary-based oil and gas company with Argentine upstream conventional oil and gas assets, and Centaurus Energy Inc., an independent, Canadian company focused on Argentine upstream oil and gas conventional and unconventional operations, are pleased to announce that they have entered into a non-binding term sheet in which they propose to combine their businesses and create an operationally diversified, financially strong, Argentina-focused oil and gas, exploration and production company. It is currently intended that the proposed transaction be a 60/40 combination in favour of Crown Point, subject to adjustment following due diligence.

Highlights

— Complementary, scalable oil production businesses strengthen combined position in Argentina

— Access to funding for upcoming Vaca Muerta oil production development in Coiron Amargo Sur Este

— Expert management with international experience and deep local ties

— Operational Efficiencies to generate cost synergies

— Transaction closing expected early Q2 2021

The combined company would possess multiple conventional oil-producing assets, a marquee, in production Vaca Muerta shale oil asset (Coiron Amargo Sur Este) and high-quality exploratory assets. The proposed transaction would bring together deeply connected and experienced industry, leadership and financial professionals inside Argentina and in North America with access to debt funding for upcoming development of Coiron Amargo Sur Este. The combined company would also benefit from operational efficiencies that are expected to lead to cost synergies.

In connection with the Proposed Transaction, the leadership of the combined company would seek a local, Argentina-listing of the combined company’s common shares.

The signing of the Term Sheet has been unanimously approved by Crown Point’s and Centaurus’ board of directors.

The Proposed Transaction is subject to a number of conditions, including the satisfactory completion of due diligence by both parties, the negotiation of a mutually satisfactory arrangement agreement, and the receipt of shareholder, TSX Venture Exchange and court approval. If the proposed transaction proceeds, it would be expected to close early in the second quarter of 2021. Further details regarding the proposed transaction will be provided if and when the conditions contained in the Term Sheet are satisfied and a definitive arrangement agreement is executed by the parties.

The parties have agreed that the combined company would have a combined management team and Board of Directors, which would include: two co-CEOs, one of whom would be David Tawil, the current interim CEO of Centaurus, and the other would be appointed by Crown Point; a CFO and COO who would be appointed by Crown Point; a seven member Board of Directors, four of whom would be appointed by Crown Point and three of whom would be appointed by Centaurus; a Chairman of the Board who would be appointed by Crown Point; and a Vice-Chairman of the Board, who would be appointed by Centaurus.

Crown Point’s CEO, Brian Moss, commented: “The proposed transaction would create an organization with the operational, managerial and financial capacity to be an important player in the Argentina upstream sector. The Coiron Amargo Sur Este is a world class unconventional asset that has the potential to provide the combined company’s shareholders with profitable, stable growth for many years.”

Centaurus’ CEO, David Tawil, commented: “We are excited at the prospect of joining with Crown Point, an exemplary operation with preeminent cornerstone investors, to create an outstanding Argentina oil & gas exploration and production company.”

Euro-Latin Capital is acting as the financial advisor to Centaurus. TingleMerrett LLP and MBP Partners are acting as legal counsel to Centaurus. Burnet, Duckworth & Palmer LLP is acting as legal counsel to Crown Point.

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