AUSTIN, Texas, March 29, 2018 (GLOBE NEWSWIRE) -- Victory Energy Corporation (OTCQB:VYEY) ("Victory" or the “Company”), today provided an update on the Company’s transition into a technology-driven, friction reducing oilfield products and services company, and announced operating results for the year ended December 31, 2017.
On August 21, 2017, the Company successfully completed a transaction with Armacor Victory Ventures, LLC (“AVV”), an affiliate of Armacor Holdings, LLC and Liquidmetal Coatings. As part of the transaction, AVV granted to Victory a worldwide, perpetual, royalty free, fully paid up and exclusive sublicense to all of AVV’s owned and licensed intellectual property for use in the oilfield services industry, except for a tubular solutions company headquartered in France.
These patented advanced oilfield technology alloy products are designed to deliver a comprehensive set of innovative drill-string solutions that help prevent aggressive wear, corrosion and friction on tool joints and pipe mid-sections. These initial products and Victory’s patented RFID enclosure are currently undergoing testing by one of the largest oilfield service companies in America. The Company’s current products are based on a patented amorphous alloy solution that we believe can dramatically reduce drill-string torque, which improves well completion time and lowers total well costs when drilling long laterals. The Liquidmetal Coatings - Armacor product line has been down-hole validated by several large U.S. based oil and natural gas companies. Victory is working to publish formal testing results in the near future.
Prior to entering into the transaction agreement with AVV, the Company was focused on the acquisition and development of unconventional resource play opportunities in a number of U.S. onshore basins. Victory conducted these operations through Aurora Energy Partners (“Aurora”), in which the Company held a 50% ownership interest with the remaining 50% ownership interest held by Navitus Energy Group (“Navitus”). On August 21, 2017, the Company entered into an agreement with Navitus for the divestiture and transfer of Victory’s 50% ownership interest in Aurora to Navitus (the “Aurora Energy Partners Divestiture”).
On November 20, 2017, Victory held a special meeting of shareholders at which it obtained approval of all necessary provisions of the transaction agreement and other Company matters. This included approval of the Aurora Energy Partners Divestiture, which was subsequently completed on December 13, 2017.
On December 19, 2017, Victory completed a 1-for-38 reverse stock split of its outstanding common stock. As a result, the Company’s issued and outstanding common stock decreased from 197,769,460 to 5,206,150 shares.
Kenny Hill, Victory’s Chief Executive Officer commented, “We believe that a well-capitalized technology-enabled oilfield services business, with ownership of a worldwide, perpetual, royalty free, fully paid up and exclusive license and rights to all future Liquidmetal® Coatings oil and gas product innovations, will provide the basis for more accessible financing to grow Victory and execute our oilfield services company acquisitions strategy. This patent protected intellectual property also creates a meaningfully differentiated oilfield services business, with little effective competition. The combination of friction reduction, torque reduction, reduced corrosion, wear and better data collection from the deployment of our RFID enclosures, only represent our initial product line. We anticipate new innovative products will come to market as we collaborate with drillers to solve their other down-hole needs. We plan to begin a new capital raise shortly with an emphasis on corporate infrastructure, customer channel development, management team buildout and oilfield service company acquisitions that align with our strategic goals. We also intend to change the name of the Company to better reflect our new oilfield tech focus.
As a result of the Aurora Energy Partners Divestiture, the Company’s financials have been restated retroactively to present the Company’s previous oil and gas operations as discontinued.
General and administrative expenses increased $407,739 to $2,174,965 for the twelve months ended December 31, 2017 from $1,767,226 for the twelve months ending December 31, 2016. The increase was primarily due to costs incurred associated with the AVV transaction and the Aurora Energy Partners Divestiture.
Depreciation and amortization expenses increased $9,039 to $15,502 for the twelve months ended December 31, 2017 from $6,463 for the twelve months ended December 31, 2016 primarily due to revisions to furniture and equipment.
Interest expense increased $204,120 to $338,236 for the twelve months ended December 31, 2017 from $134,116 for the twelve months ended December 31, 2016. The increase was primarily due to interest on amounts owed under the terms of a note payable to a Company affiliate.
Loss from continuing operations increased $620,898 to $2,528,703 for the twelve months ended December 31, 2017 from a loss of $1,907,805 for the twelve months ended December 31, 2016. The increase was primarily due to costs incurred associated with the AVV transaction and the Aurora Energy Partners Divestiture.
Income (loss) from discontinued operations decreased $18,192,789 to a loss of $18,191,583 for the twelve months ended December 31, 2017 from income of $1,206 for the twelve months ended December 31, 2016. The loss from discontinued operations in 2017 was due to the Aurora Energy Partners Divestiture.
Victory Energy Corporation (VYEY), is an Austin, Texas based publicly held company that is in the process of transitioning from an upstream oil and gas exploration and production company into a technology driven oilfield services company offering patented oil and gas technology drilling products designed to improve oil and gas well drilling outcomes. For more information about the Company today, please visit www.vyey.com.