Manitok Energy Inc. Announces Pricing And Upsizing Of Offering Of Units Consisting Of Collateralized Exchange Listed NotesTM And Warrants And The Execution Of An Underwriting Agreement
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MANITOK ENERGY INC. ANNOUNCES PRICING AND UPSIZING OF OFFERING OF UNITS CONSISTING OF COLLATERALIZED EXCHANGE LISTED NOTESTM AND WARRANTS AND THE EXECUTION OF AN UNDERWRITING AGREEMENT
October 13, 2016, Calgary, Alberta – Manitok Energy Inc. (the "Corporation" or "Manitok") (TSX-V: MEI) is pleased to announce that it has priced its previously announced marketed underwritten offering of units of Manitok (the "Units") and has increased the size of the offering from 200,000 Units to 212,071 Units for total aggregate gross proceeds of $21.2 million (the "Offering"). In connection with the Offering, Manitok has filed a prospectus supplement dated October 12, 2016 (the "Prospectus Supplement") and has entered into an underwriting agreement dated October 12, 2016 (the "Underwriting Agreement") with a syndicate of underwriters (the “Underwriters”) co-led by Raymond James Ltd. and Integral Wealth Securities Limited as joint lead bookrunners.
Each Unit will consist of a $100 principal amount senior secured notes due 2021 with an interest rate of 10.5% per annum ("Collateralized Exchange Listed Notes" or "CEL NotesTM") and 164 common share purchase warrants ("Warrants"). The Units will immediately separate into CEL Notes and Warrants upon issuance. The CEL Notes will mature on November 15, 2021. Interest on the CEL Notes will be payable quarterly in arrears. Each Warrant will entitle the holder thereof to purchase one common share of Manitok at an exercise price equal to $0.18 per common share, subject to adjustment, at any time until 5:00 p.m. (Calgary time) on November 15, 2021.
The CEL Notes and the Warrants will be governed by a note indenture and a warrant indenture, respectively, each of which will be entered into on the closing date of the Offering by the Corporation and Computershare Trust Company of Canada. Closing of the Offering is scheduled to occur on or about October 27, 2016 or such later date as may be agreed to between Manitok and the Underwriters but no later than the date that is 42 days after the filing of the Prospectus Supplement.
As previously announced in its September 29, 2016 press release (the "September 29 Press Release"), the Corporation expects to use the net proceeds of the Offering for the acquisition (the "Acquisition") of certain assets that averaged 1,934 boe/d (32% light oil and NGLs) of production in the second quarter of 2016 and that are anticipated to average approximately 1,750 boe/d (34% light oil and NGLs) in November 2016 upon the closing of the Acquisition. The remaining net proceeds of the Offering will be used to reduce the amount drawn on Manitok's senior secured credit facility. For further details on the Acquisition please refer to the Corporation's September 29 Press Release, a copy of which is available under Maintok's profile on SEDAR at www.sedar.com or on Manitok's website at www.manitokenergy.com.
Completion of the Offering and the Acquisition is subject to necessary regulatory approvals, including the approval of the TSX Venture Exchange. The Corporation has received conditional approval from the TSX Venture Exchange to list the CEL Notes, the Warrants and the common shares issuable on the exercise of the Warrants on the TSX Venture Exchange. Listing will be subject to the Corporation fulfilling all of the applicable listing requirements of the TSX Venture Exchange.
Manitok is a public oil and gas exploration and development company focused on conventional Mannville and Cardium oil and gas reservoirs in both southeast, and west central Alberta. The Corporation will utilize its experience to develop the untapped conventional oil and liquids-rich natural gas pools in its core areas of the Western Canadian Sedimentary Basin.
For further information contact:
Manitok Energy Inc.
Massimo M. Geremia, President and Chief Executive Officer
Or view our website at www.manitokenergy.com
Forward-looking Information Cautionary Statement
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the expectations and assumptions concerning the amount of proceeds to be raised under the Offering, use of proceeds from the Offering, satisfaction of certain conditions of the Offering, completion of the Offering and timing thereof, the timing and completion of the distribution of the Units pursuant to the Offering, listing of the CEL Notes and Warrants on the TSX Venture Exchange, satisfying certain conditions of the Acquisition will be met in a timely manner and that the Acquisition will close, anticipated benefits of the Acquisition and anticipated production rate of the assets acquired under the Acquisition following the successful completion of the Offering and the Acquisition.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Manitok, including without limitation the successful completion of the Offering, the successful completion of the Acquisition, the impact of increasing competition, the general stability of the economic and political environment in which Manitok operates, the timely receipt of any required regulatory approvals, equipment and services in a timely and cost-efficient manner, drilling results, the ability of the operator of the projects in which Manitok has an interest to operate the field in a safe, efficient and effective manner, the ability of Manitok to obtain financing on acceptable terms, field production rates and decline rates, the ability to replace and expand oil and natural gas reserves through acquisition, exploration and development, the timing and costs of pipeline, storage and facility construction and expansion and the ability of Manitok to secure adequate product transportation, future oil and natural gas prices, currency exchange and interest rates, the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Manitok operates, and the ability of Manitok to successfully market its oil and natural gas products, the ability of Manitok to obtain qualified staff, prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.
Although Manitok believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Manitok can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, competitive factors in the oil and gas industry, prevailing economic conditions, and other factors, many of which are beyond the control of the the Corporation. Certain of these risks are set out in more detail in Manitok's current Annual Information Form, which is available on Manitok's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") website at www.sedar.com and on the Corporation's website at www.manitokenergy.com.
Forward-looking information is based on estimates and opinions of management of Manitok at the time the information is presented. Manitok may, as considered necessary in the circumstances, update or revise such forward-looking information, whether as a result of new information, future events or otherwise, but Manitok undertakes no obligation to update or revise any forward-looking information, except as required by applicable securities laws.
The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. Per boe amounts have been calculated using a conversion ratio of six thousand cubic feet of natural gas (6 mcf) to one barrel of oil (1 bbl). The boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.