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CALGARY, AB, April 29, 2021 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to
announce that, as a result of excess demand, it has agreed with the
syndicate of underwriters, led by Cormark Securities Inc. and
National Bank Financial Inc. (collectively, the
"Underwriters"), to increase the size of its previously
announced bought deal public offering of flow-through common
shares. The Company will now issue 33,900,000 common shares (the
"Flow-Through Shares") of Surge, to be issued as
"flow-through shares" with respect to "Canadian development
expenses" within the meaning of the Income Tax Act
(Canada) and the regulations
thereunder in force as of the date hereof (the "Tax Act") at
a price (the "Offering Price") of $0.59 per Flow-Through Share, for gross proceeds
to the Company of approximately $20,001,000 (the "Offering").
Surge has granted to the Underwriters an option to purchase
additional Flow-Through Shares, equal to 15% of the number of
Flow-Through Shares sold pursuant to the Offering at the Offering
Price, for market stabilization purposes and to cover
over-allotments for a period expiring 30 days after the date of
closing.
Surge will use proceeds from the Offering to incur eligible
"Canadian development expenditures" within the meaning of the Tax
Act in an aggregate amount of not less than the gross proceeds
raised from the Offering and will renounce qualifying expenditures
to purchasers of the Flow-Through Shares on or before December 31, 2021. The proceeds from the Offering
will fund an expanded 2H/21 capital program, focused in the
Company's Sparky core area.
The Flow-Through Shares will be offered by way of short form
prospectus in each of the provinces of Canada, other than for Québec, pursuant to
National Instrument 44-101 – Short Form Prospectus
Distributions and some may be resold in the United States pursuant to an exemption
from the registration requirements of the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") and in
such other jurisdictions outside of Canada and the
United States as agreed to by the Company, in each case in
accordance with all applicable laws and provided that no
prospectus, registration statement or similar document is required
to be filed in such jurisdiction.
Closing is now expected on or about May
13, 2021 and is subject to Toronto Stock Exchange and other
necessary regulatory approvals. Surge anticipates releasing its
Q1/21 financial statements on or before May
14th, 2021.
The Flow-Through Shares have not been, and will not be,
registered under the U.S. Securities Act or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, United States persons
absent registration or any applicable exemption from the
registration requirements of the U.S. Securities Act and applicable
U.S. state securities laws. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities
in the United States, nor will
there be any sale of these securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
FORWARD LOOKING STATEMENTS:
This press release contains forward-looking statements. The use
of any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe" and similar
expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. More particularly, this press release contains
statements with respect to closing of the Offering, the use of
proceeds of the Offering, the tax treatment of the Flow- Through
Shares and the timing of the renunciation of the development
expenses; anticipated production for Q1/21 and anticipated cash
flow from operating activities and hedging losses for Q1/21.
The forward-looking statements are based on certain key
expectations and assumptions made by Surge, including expectations
and assumptions the performance of existing wells and success
obtained in drilling new wells; anticipated expenses, cash flow and
capital expenditures; the application of regulatory and royalty
regimes; prevailing commodity prices and economic conditions;
development and completion activities; the performance of new
wells; the successful implementation of waterflood programs; the
availability of and performance of facilities and pipelines; the
geological characteristics of Surge's properties; the successful
application of drilling, completion and seismic technology; the
determination of decommissioning liabilities; prevailing weather
conditions; exchange rates; licensing requirements; the impact of
completed facilities on operating costs; the availability and costs
of capital, labour and services; and the creditworthiness of
industry partners.
Although Surge 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 Surge 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, risks associated with
the condition of the global economy, including trade, public health
(including the impact of COVID-19) and other geopolitical risks;
risks associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of
reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks); commodity price and exchange rate
fluctuations and constraint in the availability of services,
adverse weather or break-up conditions; uncertainties resulting
from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; and
failure to obtain the continued support of the lenders under
Surge's bank line. Certain of these risks are set out in more
detail in Surge's AIF dated March 9,
2021 and in Surge's MD&A for the period ended
December 31, 2020, both of which have
been filed on SEDAR and can be accessed
at www.sedar.com.
The forward-looking statements contained in this press release
are made as of the date hereof and Surge undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
SOURCE Surge Energy Inc.