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April 3, 2025

Source: Yahoo Finance

CALGARY, AB, April 3, 2025 /CNW/ - Westgate Energy Inc. (the "Company" or "Westgate") (TSXV: WGT) is pleased to announce that, further to its press release dated March 10, 2025, it has closed a first lien senior secured loan for up to US$25 million (the "Senior Secured Loan") from Cibolo Energy Partners, LLC and certain of its affiliates (collectively, "Cibolo"), a Houston‐based firm focused on energy investment opportunities. The Senior Secured Loan is a strategic and transformational transaction for Westgate that will allow the Company to fund drilling on its existing lands and on strategic Mannville Stack focused assets to potentially be acquired in East-Central Alberta near Frog Lake (the "Strategic Acquisition").

Westgate entered into a first lien senior secured credit agreement with Cibolo providing for a multi‐draw, non‐revolving term loan facility of a maximum aggregate principal amount of up to US$25.0 million. Westgate has made an initial draw of US$10.0 million. An additional US$10.0 million has been committed and remains available for draw. Additional commitments are subject to further approval by Cibolo. The Senior Secured Loan carries an interest rate due quarterly of SOFR plus 7.75%, with an SOFR floor of 4.25%, and will mature on April 3, 2029. Based on the current SOFR rate, the initial interest rate will be approximately 12.04%. The Company's wholly owned subsidiary, Westgate Energy Operations Ltd., has guaranteed the Senior Secured Loan.

In connection with the Senior Secured Loan, the Company issued Cibolo non-transferable common share purchase warrants (the "Loan Warrants") entitling Cibolo to acquire up to 24,343,659 common shares in the capital of the Company (the "Common Shares"). Each Loan Warrant will entitle Cibolo to acquire one Common Share until April 3, 2030 at an exercise price equal to C$0.21 per Common Share.

Westgate CEO Dan Brown comments:
"We are very pleased to be working with the Cibolo team. The access to capital that this loan provides, will facilitate Westgate's development of its recently acquired lands in the Mannville Stack Fairway of Eastern Alberta. We are excited to get the drill bit in the ground and begin our 2025 capital program right after spring breakup."

Upcoming Capital Program
Westgate is planning to commence a three well program in the second half of May 2025 pending the timing of spring road bans. The drilling program will consist of three horizontal wells, each targeting separate Mannville Stack horizons within the Beaverdam area near Cold Lake, Alberta. These three wells are expected to take 25-30 days in aggregate from spud to rig release and are anticipated to be on production in July.

Westgate Asset Summary
Westgate holds a total of 6 sections of undeveloped land in the Cold Lake area of Eastern Alberta.  These lands are deemed to be prospective for up to four unique geologic horizons within the Mannville Stack group of formations. Westgate has identified up to 40 potential horizontal locations that can be drilled on its land in this area, all targeting various Mannville Stack horizons.

The previously announced Strategic Acquisition will provide Westgate with 14.5 sections of mostly undeveloped land highly prospective for horizontal development within the Mannville Stack Waseca Formation. To date, Westgate has identified over 57 horizontal locations targeting the Waseca and other Mannville Stack zones that are oil prone in the area. The Strategic Acquisition is subject to certain conditions that are expected to be met in the second quarter of 2025. Subject to closing Strategic Acquisition, Westgate expects to commence a drilling program on these lands later in 2025, subject to board and lender approval.