Razor Energy Corp. ("Razor” or the “Company”) (TSXV: RZE) in
conjunction with FutEra Power Corp. (“FutEra”), a wholly owned
subsidiary of Razor, is pleased to announce it is entering a
definitive agreement and closed senior debt financing of its
Co-produced Geothermal Power Project in Swan Hills, Alberta (the
“Project”). The Project will be held within FutEra’s wholly owned
subsidiary Swan Hills Geothermal Power Corp. (“Swan Hills Power”).
The construction of the Project will be funded
by Arena Investors, LP (“Arena”) by way of amending the existing
term loan agreement between Arena and Razor Royalties Limited
Partnership (“RRLP”), a wholly owned subsidiary of Razor, (the
“Amended and Restated Term Loan”) for an additional principal
amount of US$11,042,403 (the “Term Loan 3”). Term Loan 3 will carry
the following terms:
- 48-month maturity.
- First lien security on the assets
held within Swan Hills Power and FutEra’s equity in Swan Hills
Power.
Months 1 to 24
- Interest payments only on the
prevailing monthly principal balance of Term Loan 3 at an
annualized interest rate of 7.7875%;
- Accrued interest on the prevailing
monthly principal balance of Term Loan 3 at an annualized interest
rate of 3%.
Months 25 to 48
- Principal payments at an
amortization rate of 5% on the prevailing monthly principal balance
of Term Loan 3;
- Interest payments on the prevailing
monthly principal balance of Term Loan 3 at an annualized interest
rate of 7.7875%;
- Accrued interest on the prevailing
monthly principal balance of Term Loan 3 at an annualized interest
rate of 3%;
- The principal balance of Term Loan
3 at maturity is expected to be US$3.6 million.
The funded principal amount, after the original
issuer discount, is US$10 million, less related fees and expenses.
Upon closing the Term Loan 3, the principal balance of the Amended
and Restated Term Loan will be US$25.7 million. Other terms of the
Amended and Restated Term Loan are materially unchanged from the
initial term loan as further described in the Company’s press
release dated February 18, 2021. The security is provided by a
first lien on all assets within Razor Royalties Limited
Partnership, Razor Holdings GP Corp, and FutEra’s equity in Swan
Hills Power. The Amended and Restated Term Loan is also secured by
a second lien on the assets of Razor, excluding Razor’s
subsidiaries Blade Energy Services Corp. (“Blade”), FutEra, and
Razor Resources Corp.
Arena is a New York-based institutional asset
manager that has funded approximately 40 privately negotiated
transactions within the energy and resources sector over the last
five years, providing innovative capital solutions for middle
market companies in cases where others cannot.
AMENDMENTS TO ROYALTY
SECURITY
In conjunction with closing of the Amended and
Restated Term Loan, Razor has increased the royalty from 9% to 10%
on all corporate production (the “GORR”). The purpose of the GORR
is to provide collateral to Arena. The repayment of the Amended and
Restated Term Loan follows the agreed upon amortization payment
schedule.
The GORR is owned by RRLP, which has two
partners within the partnership. The general partner is Razor
Holdings GP Corp., a wholly owned subsidiary of Razor, and the
limited partner is Razor.
Once the Amended and Restated Term Loan is
repaid by RRLP, the security associated with the Amended and
Restated Term Loan will terminate.
THE PROJECT
The total construction and commissioning budget
for the Project is $37 million for aggregate nameplate electricity
output of 21 MW. Electricity sales revenue is anticipated to
commence by September 30, 2022. Forecasted earnings before
interest, taxes depreciation and amortization (“EBITDA”) is between
$4 million and $5 million annually, using current forward pricing
for electricity and natural gas.
FutEra’s next phase of the Project will be the
design and implementation of a Carbon Capture with Usage and/or
Sequestration solution, with the objective to create a net negative
carbon emitting power generation facility.
For further investor information please contact the undersigned
at info@futerapower.com or refer to our website at
www.futerapower.com.
FUTURE PROJECTS
FutEra’s development efforts will focus on
larger scale, lower emissions natural gas and renewable electricity
generation projects with similar themes – leveraging Razor and
other oil and gas producer’s operations to create financial and
tactically advantaged development scenarios, and prospective
competitive returns to investors.
BACKGROUND
Legacy oil and gas fields face economic
challenges with lower production levels and high fixed costs.
However, these fields also have practical advantages when
considering the existing infrastructure, pipelines, wells, and
operational footprints. To meet the objectives of creating lower
carbon electricity and leveraging oil and gas operations, FutEra
and Razor have successfully designed and are in the construction
phase of a geothermal/natural gas hybrid power plant in Swan Hills,
Alberta.
Razor produces and injects large volumes of hot
water, a renewable form of geothermal energy, daily as part of its
ongoing conventional oil and gas operations and waterflood
activities. This hot water provides FutEra with the opportunity to
capture geothermal heat energy to generate power with zero
Greenhouse Gas (GHG) emissions. Co-production means no new surface
land footprint is required as the Project utilizes existing assets
such as processing infrastructure, producing wells, produced water
reinjection system and an operating gathering and distribution
system. In addition, our co-production approach aligns Alberta’s
fledgling geothermal industry to develop alongside Alberta’s
well-respected, world-class oil and gas operations, safety
standards and regulatory best practices. Geothermal power is
baseload and solves for the intermittent challenge of other
renewable energy sources. FutEra’s Project stands out as a
demonstration of creative and practical co-produced geothermal
energy production.
Razor and FutEra continue to demonstrate the
synergies and cooperation needed to define a type of transition
energy and sets the standard of how traditional oil and gas
companies can evolve into ‘energy and technology’ companies
necessary for the future of the Alberta energy complex.
About Razor
Razor is a publicly traded junior oil and gas
development and production company headquartered in Calgary,
Alberta, concentrated on acquiring, and subsequently enhancing,
producing oil and gas properties primarily in Alberta. The Company
is led by experienced management and a strong, committed Board of
Directors, with a long-term vision of growth, focused on efficiency
and cost control in all areas of the business. Razor currently
trades on TSXV under the ticker "RZE".
www.razor-energy.com
Razor has two active subsidiaries, FutEra and
Blade Energy Services Corp. (“Blade”).
About Arena
Arena is an institutional asset manager founded
in partnership with The Westaim Corporation (TSXV: WED). With
$2.8 billion of committed assets under management as of January 1,
2022, and a team of over 100 employees in offices globally, Arena
provides creative solutions for those seeking capital in special
situations. The firm brings individuals with decades of
experience, a track record of comfort with complexity, the ability
to deliver within time constraints, and the flexibility to engage
in transactions that cannot be addressed by banks and other
conventional financial institutions. See
www.arenaco.com for more information.
About Blade
Blade Energy Services is a subsidiary of Razor.
Operating in west central Alberta, Blade’s primary services include
fluid hauling, road maintenance, earth works including well site
reclamation and other oilfield services.
www.blade-es.com
For additional information please
contact:
Doug Bailey |
|
Lisa Mueller |
President and Chief Executive Officer |
|
President and Chief Executive Officer |
Razor Energy Corp |
|
FutEra Power Corp |
Executive Director |
|
|
FutEra Power Corp |
|
|
|
|
|
Razor Energy Corp/FutEra Power Corp800, 500-5th Ave SWCalgary,
Alberta T2P 3L5Telephone: (403) 262-0242 |
|
|
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READER ADVISORIES
FORWARD-LOOKING STATEMENTS:
This press release contains forward-looking statements. More
particularly, this press release contains statements concerning,
but not limited to, the Company’s amendment and restatement of its’
term loan facility with Arena and repayment of such term loan,
increase of the royalty rate on the GORR, construction budget and
anticipated earnings of the Project, design and implementation of
the Project, electricity output of the Project and potential future
projects of FutEra. In addition, the use of any of the words
“anticipate”, “believe”, “intend”, “may”, “is”, “will”, “should”,
“expect” and similar expressions are intended to identify
forward-looking statements.
The forward-looking statements are based on
certain key expectations and assumptions made by the Company,
including but not limited to expectations and assumptions
concerning the continued availability of capital, current
legislation, receipt of required regulatory approvals, the timely
performance by third-parties of contractual obligations, the
success of reactivation, drilling and development activities, the
performance of existing wells, the performance of new wells, the
Company’s growth strategy, general economic conditions,
availability of required equipment and services prevailing
commodity prices, price volatility, price differentials and the
actual prices received for the Company's products. Although the
Company 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 the
Company 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 several factors and risks. These
include, but are not limited to, risks associated with the oil and
gas industry and geothermal electricity projects 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; variability in
geothermal resources; as the uncertainty of reserve estimates; the
uncertainty of estimates and projections relating to production,
costs and expenses, and health, safety and environmental risks),
electricity and commodity price and exchange rate fluctuations,
changes in legislation affecting the oil and gas and geothermal
industries and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures. Please refer to the risk factors
identified in the annual information form and management discussion
and analysis of the Company which are available on SEDAR at
www.sedar.com.
In addition, the effects, risks and impacts
related to widespread pandemic outbreaks, including the coronavirus
disease (COVID -19), and any related actions taken by businesses
and governments, ongoing results, commodity prices, industry
conditions and activity levels, currency exchange rates, financial
positions or results are unknown at this time and could cause the
Company’s actual results to differ materially from the
forward-looking statements contained herein.
The forward-looking statements contained in this
press release are made as of the date hereof and the Company
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.
This press release contains future-oriented
financial information and financial outlook information
(collectively, "FOFI") about the Project including the forecasted
earnings, all of which are subject to the same assumptions, risk
factors, limitations and qualifications as set forth in the above
paragraphs. FOFI contained in this press release was made as of the
date of this press release and was provided for providing further
information about Razor’s and its subsidiaries anticipated future
business operations. Razor disclaims any intention or obligation to
update or revise any FOFI contained in this press release, whether
as a result of new information, future events or otherwise, unless
required pursuant to applicable law. Readers are cautioned that the
FOFI contained in this press release should not be used for
purposes other than for which it is disclosed herein.
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 press release.
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