Trillion Energy Signs Letter of Intent for USD $17.5 Million in Debt and Royalty Financing

The proposed financing will be earmarked for funding new SASB gas field production wells

VANCOUVER, British Columbia and ANKARA, Turkey, April 27, 2021 (GLOBE NEWSWIRE) -- Trillion Energy International Inc. (“Trillion” or the “Company”) (CSE: TCF) (OTC: TCFF) (Frankfurt: 3P2N) is pleased to announce it has signed a letter of intent (‘the LOI”) with a US investment fund (the “Investor”) to obtain up to USD $17,500,000 in new financing (“the Financing”), to finance the development of new producing gas wells on the SASB natural gas field, Black Sea. The LOI is subject to due diligence where the Company and Investor will diligently work towards definitive agreements to bring the financing to fruition. The planned Financing has three components as described below.

Overriding Royalty on Gas and Oil Production

A royalty sale for net proceeds to Company of USD $4,500,000 in exchange for an overriding royalty interest (“ORRI”) in the natural gas and oil production at both of the Company’s Cendere Oil Field and SASB Gas Fields. The ORRI is 5% on the Company’s net interest in the Cendere Oil Field production and 3% on the SASB Gas Field production net to Company. The ORRI is extinguished upon accumulated ORRI payments of USD $16,000,000.

Convertible Debt

The LOI includes a draw-down loan facility for up to USD $13,500,000, which will be repayable in equal installments over a thirty-six-month period and bears an interest rate of 13% per annum (“the Loan Facility”). The Loan Facility may be prepaid at the election of the Company after 12 months. Additional terms of the Loan Facility include:

A first advance on the Loan Facility in the amount of USD $16,000,0000 (the “First Advance”) payable immediately upon closing to be used for working capital, general corporate purposes and for funding development expenditures on the SASB gas field. The First Advance is convertible at the election of the Investor into the common stock of the Company at a fixed price of USD $.28/share during the term in which the Loan Facility is outstanding.

Subsequent advances on the Loan Facility for up to USD $9,500,000 available to the Company prior to, but not after the date that is 30 days prior to the maturity of the Loan Facility, and where each draw down by Company may not be less than USD $1,500,000. The Loan Facility advances may be used solely by the Company for the purpose of funding development expenditures on the Company’s assets located in the South Akcakoca Sub-Basin (ie the SASB Gas Field) and must be expended within twelve (12) months of each respective draw being made (“the Subsequent Advances”).