Verona Corporate Update
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/01/13 -- Verona
Development Corp. (TSX VENTURE:VDC)(FRANKFURT:V5D) provides the
following update in conjunction with the filing of its unaudited
interim Financial Statements and Management Discussion & Analysis for
the nine month period ended December 31, 2012.
The Company incurred a net gain for the nine months ended December
31, 2012, of $31,087 compared to a net loss of $226,651 for the
comparative period. The comparative results between the nine month
periods ended December 31, 2012 and 2011 are as expected, with the
more significant differences between the nine months periods being as
-- Oil sales totaled $277,492 compared to $379,050 for the comparative
period. The decrease of $183,209 is due to lower oil production.
-- The Company recovered $112,500 in loans receivable that were previously
-- The Company had a gain of $174,909 through the sale of 6,314,500 its
marketable securities for settlement of $378,870 for amounts owing.
During the period, the Company was transferred to NEX. Verona has
applied to be reinstated for trading on NEX and is engaged with the
TSX Venture Exchange in that process. As part of that process, Mr.
Martin Wood was elected to the Board as an independent director and,
effective March 1, 2013, and Mr. James Mackie has been appointed
Chief Financial Officer of the Company.
Mr. Wood has spent a dozen years in the London banking and financial
community, working for N.M. Rothschild, Standard Bank London Ltd. and
the Benfield Group. During this time he has worked on over $2BN worth
of transactions for the resource sector.
Mr. Mackie is a member of the Association of the Certified General
Accountants of British Columbia and Canada. Mr. Mackie has over 15
years of corporate experience in financial management and
administration, including corporate governance, government and
securities compliance. More recently, he has acted as Corporate
Controller for a number of mining exploration companies listed on the
Toronto Stock Exchange and TSX Venture Exchange.
Mr. Mackie is replacing the former Chief Financial Officer, Tom
Needham C.A, who is retiring from the Company. The Company recognizes
with appreciation Mr. Needhams' contribution to the Verona
Development Corp. over the last several years.
In addition, the Company has brought up to date its required filings
pursuant to National Instrument 51-101 - "Standards of Disclosure for
Oil & Gas Activities". The Company's Forms 51-101F1, F2 and F3 have
been filed with the applicable Securities Commissions and may be
viewed under the Company's profile on SEDAR at www.sedar.com. With
those steps taken, and with its most recent quarterly filings
complete, the Company expects to be following up with the Exchange in
the near future.
Also during the period, the Company engaged in negotiations with
Canadian Natural Resources ("CNR"), a general partnership, by its
managing partner, Canadian Natural Resources Limited ("CNRL") for the
sale of the Company's 60% working interest in its oil and natural gas
projects in the Gainsborough South area of Saskatchewan. The Company
originally earned its interest in the property from Strand Resources
Ltd. and understands that through a series of transactions CNR came
to own Strand's 40% working interest in the property, together with
the battery to which production from the wells is delivered, and
assumed responsibility for operating the wells. The Company was not a
party to any of those transactions.
Shortly after acquiring the Strand interest, during February, 2008,
CNR offered to purchase the Company's interest. That offer did not
reflect the Company's estimate of the value of its interest and
Company declined the offer. CNR subsequently presented to the Company
a form of an "effluent processing" agreement and suggested that it
would like the Company to start paying dewatering fees to CNR. The
Company declined to enter into such an agreement, as it had not paid
dewatering charges to Strand and had no obligation to agree to pay
dewatering charges to Strand's successor in title. Nonetheless, CNR
thereafter commenced to unilaterally charge the Company for
"de-watering", and has failed to pay the Company for its share of oil
The Company has no contract with CNR, and it is the Company's
position that there is no basis on which CNR has the right to levy
dewatering charges against the Company. Although the Company is
required under International Financial Reporting Standards to record
such charges as liabilities in its financial statements, the Company
denies any liability for such charges. CNR apparently continues to
operate the well notwithstanding the fact that its dewatering charges
to the Company have consistently exceeded the value of the Company's
60% share of production from the well since CNR took over operation
of the well.
During the nine month financial period ended December 31, 2012, CNR
offered to purchase the Company's interest. The Company made a
counter-offer. CNR responded by commencing legal proceedings against
the Company in the Court of Queen's Bench of Alberta (Court File
#1201-09029), alleging that the Company is "operator" of the wells,
alleging that the Company is a party to a contract with CNR for
"effluent processing" and alleging that the Company is indebted to
CNR in the amount of approximately $522,000. The Company denies all
of those allegations.
Upon receipt of the Company advised the solicitors for CNR that if
CNR were to proceed with such a lawsuit, the Company would defend
itself and counterclaim against CNR. The Company requested a copy of
the contract alleged by CNR. In response, CNR provided an unsigned
copy of the form of "effluent processing" contract presented to the
Company in 2008 and rejected by the Company. Following additional
exchanges between legal counsel, CNR agreed to a suspension of the
litigation to permit additional negotiation for the sale of the
CNR ultimately agreed to pay the Company $75,000 and to eliminate the
alleged debt for dewatering charges. Subsequently, however, CNR
advised by email that it was prepared to pay only approx. $20,000 and
was intending to refer the matter back to litigation. The Company
reminded CNR of its agreement to purchase the interest for $75,000
and, in response, has been advised that its contact at CNR has sought
instructions from CNRL management. The Company is currently awaiting
a response. Absent a favourable response, the Company will be
claiming against CNR for, among other things, its 60% share of the
profit from production and damages.
On Behalf of the Board of Directors
Verona Development Corp.
Gurminder Sangha, Director
This news release may contain forward-looking statements including
but not limited to comments regarding the timing and content of
upcoming work programs, geological interpretations, receipt of
property titles, potential mineral recovery processes, etc.
Forward-looking statements address future events and conditions and
therefore, involve inherent risks and uncertainties. Actual results
may differ materially from those currently anticipated in such
Neither 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.
Verona Development Corp.
(604) 681-4653 or 1-866-282-8398
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