CITADEL EXPLORATION, INC. (OTCMKTS:COIL) Files An 8-K Unregistered Sales of Equity Securities

ME Staff 8-k
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CITADEL EXPLORATION, INC. (OTCMKTS:COIL) Files An 8-K Unregistered Sales of Equity Securities
Item 3.02 Unregistered Sale of Debt Securities & Joint Venture Drilling Partnership

On March 16, 2018, Citadel Exploration, Inc. (the "Company") closed a $3,000,000 Senior Secured Debt Facility. With Tranche A funding of $1,750,000. The facility has a one-year term, bears 10% interest and receives one five-year warrant priced at $0.10 per share for every two dollars drawn on the facility. As such the company issued 875,000 warrants upon closing Tranche A. Future draw downs are at the discretion of the lender. This new debt facility retired the Company’s prior bridge loan and is the only debt currently owed by the Company.

The Company has also signed a joint venture to fund two development wells. The JV partner will fund 50% of the working interest and receive 90% of oil sales until pay out, plus 18% return on capital. Once pay out occurs the production reverts to the Company on an 80/20 basis.

No commissions were paid in connection with the private placements.

The issuance of shares of the Company's common stock in the private placement and debt conversion was made in reliance on the private offering exemption of Section 4(2) of the Securities Act of 1933, as amended, and/or the private offering safe harbor provisions of Rule 506 of Regulation D promulgated thereunder based on the following factors: (i) the number of offerees or purchasers, as applicable, (ii) the absence of general solicitation, (iii) representations obtained from each of the investors in the private placement with respect to their status as accredited investors, (iv) the provision of the type of disclosure that registration would provide, and (v) the placement of restrictive legends on the certificates reflecting the shares of common stock.


About CITADEL EXPLORATION, INC. (OTCMKTS:COIL)

Citadel Exploration, Inc., formerly Subprime Advantage, Inc., is an energy company engaged in the exploration and development of oil and natural gas properties. The Company is focused on the acquisition and drilling of oil and natural gas mineral leases. Its properties are located in the Salinas and San Joaquin Basins of California. The Company’s projects include Project Indian, Project Yowlumne and Kern Bluff Oil Field. The Company’s Project Indian is located in the Bitterwater sub-basin of the Salinas Basin, north of the giant San Ardo Field. The Company has approximately 75% interest in the Yowlumne lease. Additionally, the Company holds 100% interest in the Yowlumne #2-26 well, and the approximately 160 acres surrounding the well bore. The Company owns approximately 1,100 acres of leases in production facilities of Kern Bluff Oil Field in Kern County, California. It has 100% working interest in the field with approximately 80% net revenue interest.