Virginia Hills Oil Corp. Announces Closing of the Acquisition of A Private Oil and Gas Producer

CALGARY, ALBERTA--(Marketwired - April 27, 2015) -

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Virginia Hills Oil Corp. ("Virginia Hills" or the "Company") (TSX VENTURE:VHO) and its wholly-owned subsidiary, 1834163 Alberta Ltd., have completed the acquisition (the "Acquisition") of a private oil and gas producer ("PrivateCo") with approximately 100 boe/d (85% light oil) of production, 24,000 net undeveloped acres in the Greater Red Earth area and $51 million of high quality tax pools.

In connection with the Acquisition, Virginia Hills issued an aggregate of 4,000,000 share purchase warrants of Virginia Hills ("Series C Warrants"), 2,165,556 common shares of Virginia Hills ("Virginia Hills Shares") and assumed approximately $11.8 million in debt. Each Series C Warrant entitles the holder to purchase one (1) Virginia Hills Share at a price of $0.50 for a period of three (3) years.

Of the 2,165,556 Virginia Hills Shares issued in connection with the Acquisition, 983,624 Virginia Hills Shares at a deemed price of $0.25 per share were issued to former executive officers of PrivateCo ("PrivateCo Executives") in satisfaction of a portion of their severance. Up to a maximum of an additional 1,229,530 Virginia Hills Shares may be issued at a deemed price of the greater of $0.30 and the Market Price (as such term is defined in the TSX Venture Exchange Company Finance Manual) at the time of issuance, in satisfaction of the balance of severance obligations owing to the PrivateCo Executives. To the extent that the PrivateCo Executives elect to receive the remainder of their severance in cash, such payments shall be subject to approval by Virginia Hills' senior lender.

Amended and Restated Credit Facilities

Following the completion of the Acquisition, PrivateCo, the wholly-owned subsidiary of Virginia Hills entered into an agreement with a financial institution to amend and restate the terms of the credit facilities which were in place prior to the Acquisition. The amended and restated credit facilities (the "New Facilities") provide for an operating loan facility of $6 million and a non-revolving reducing loan facility of $5 million. Pursuant to the terms of the New Facilities, the financial institution is entitled from the date hereof until April 15, 2016, to convert up to $4 million of outstanding debt under the non-revolving reducing loan into Virginia Hills Shares at a deemed price of the greater of $0.30 and the Market Price at the time of issuance.