Advantagewon to Acquire Groundstar Resources for Tax Losses
Toronto-based Advantagewon Oil Corp. (AOC) has signed a Letter of Intent (LoI) to acquire Calgary-based independent oil & gas company Groundstar Resources Ltd., a company that has approximately C$30 million in accumulated tax losses. AOC stated that the acquisition of these losses will allow it to “defer a significant amount of income tax when it enters a taxable position.”
Groundstar was previously engaged in exploration, development and production in the Neilburg area of Saskatchewan, and also held an interest a concession agreement with a JV partner in Egypt. However, trading in the company’s shares on the Toronto Stock Exchange (TSX) had been suspended in September 2018 due to non-compliance issues, and the company ceased oil & gas operating activities during 2019. AOC is currently focused on development and enhanced oil recovery opportunities in Canada following the sale of all of its remaining U.S. assets in early 2020.
AOC disclosed that the purchase price for the tax losses will be C$335,000 subject to certain adjustments and will be paid for via the issuance of AOC stock.
The companies expect to enter into a definitive agreement within the next 3 months.